The move came after Mr Foot distributed copies of his latest column, which the editor had refused to publish. It was critical of the 'victimisations, union-busting and general macho management' which, it said, was now in evidence at the Daily Mirror.
In his statement yesterday, Mr Banks said Mr Foot was being offered sick leave 'so he can have a period of rest', adding that he hoped Mr Foot 'would seek professional help'.
Mr Foot, who was named Journalist of the Year in the 1990 What the Papers Say awards, said last night: 'This is untrue. I am not sick. I have not been offered sick leave.
'The statement is yet another example of the depths to which the Mirror management are prepared to sink when they are criticised. Rather than deal with the factual criticisms of their management in my unpublished column, they resort to the foulest possible personal libel.'
Mr Foot yesterday distributed copies of the column attacking the new regime at the Daily Mirror to journalists and passers-by outside the newspaper's offices in London.
He said: 'It was no longer possible for me to operate as an investigative journalist on the Daily Mirror, exposing sackings all over the country, victimisations, union busting and general macho management of the most disgusting kind, when the most atrocious examples of these things were taking place in my corridor.'
The Daily Mirror has been in crisis since David Montgomery, an abrasive Ulsterman and former editor of two of Rupert Murdoch's newspapers, took over as chief executive in October. He sacked the editor, Richard Stott, and appointed Mr Banks in his place.
Since then, nearly 40 journalists have been sacked or have left and management has taken a tough line with the unions in an organisation where industrial relations have traditionally been relatively cosy.
Mr Foot, a member of the Trotskyist Socialist Workers Party, has made little secret of his dismay at the new regime's attitude to the staff. He and Mr Montgomery, a strong Ulster Unionist, are poles apart politically, although the paper continues to support Labour.
But the column he wrote for yesterday's newspaper was too much for Mr Banks, who banned it. Mr Foot listed the journalists who have left the paper and accused the management of refusing to negotiate any agreements with staff and victimising union officials. He added: 'All is gloom and fear. No one knows where next the axe will fall.'
Yesterday Mr Foot said as he handed out copies of the column: 'They should print it. If we lived in a democratic country and had free speech, which the Mirror is constantly going on about, they should print it.
'When Montgomery came in, I didn't expect to last a day because he has got absolute contempt for what I do and I have got absolute contempt for what he does, so I didn't really expect to last very long. I don't have the power to dismiss him, unfortunately, otherwise I would have used it. He does have the power to dismiss me.'
He added: 'Whether it is the end for me at the Daily Mirror is very much a question for the management here, who will be confronted next week with a column whose content will not be dissimilar to the one I have presented today,' he said.
But his editor was clearly unwilling to meet this challenge. He said of Mr Foot: 'We sincerely hope he seeks professional help during this time and MGN will continue to pay his pounds 55,000 salary. All of us at the Mirror are very sympathetic towards Paul's condition.'
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