A senior judge ruled yesterday that there was no remedy available to the infamous child -killer in English law.
Now Brady is planning an action in the Court of Appeal, and if that fails, a bid to win restitution via the European Commission for Human Rights.
Mr Justice Michael Moreland, yesterday convened a session of the High Court in a recreation room at Ashworth hospital,the top security unit on Merseyside where Brady is being held.
The judge heard submissions on the claim for malicious falsehood brought by Brady against Express Newspapers plc over an article published in the Sunday Express on 12 June 1994.
In the story, a writer, Christine Hart, claimed that Brady had assaulted her during a visit to the hospital when she was left alone with him unsupervised in his room.
Ms Hart is the authoress of a book in which she claims she grew up believing Ian Brady was her father until she discovered that to be untrue. She had visited Brady and engaged in a lengthy exchange of correspondence with him.
Brady complained that the article in the Sunday Express had been concocted by Ms Hart in return for money. He said the newspaper had gone ahead with publication knowing the story to be untrue. He said that the News of the World had refused to publish it.
After nearly four hours, lawyers representing Express Newspapers left Ashworth hospital, refusing to comment. Shortly afterwards, Mr Justice Moreland was driven away from the top-security mental hospital at Maghull, Merseyside.
Brady's solicitor, Robin Makin, emerged from the hospital and issued a statement on Brady's behalf, saying: "The allegations made by Christine Hart in the Sunday Express of 12 June 1994 were false and she repeatedly admitted this was so to the News of the World, who refused to publish the allegations.
"For the purposes of the hearing today, the Sunday Express accept that the allegations were false and maliciously published by them.
"The judge decided that in his view there was no remedy available to me in English law.
"The judge has, however, extended my time for seeking leave to appeal to the Court of Appeal and it is an avenue which I will be pursuing.
"If unsuccessful, I will be appealing to the European Commission of Human Rights in Salzburg.
"Mr Brady is obviously very disappointed. I have got nothing further to say.''