BA 'mole' swung libel settlement with Virgin

BRITISH AIRWAYS moved to settle its legal battle with Virgin Atlantic after it became obvious that the smaller airline was in receipt of highly damaging information from a former BA employee.

Sources close to the case, which will be settled in the High Court tomorrow with a fulsome apology from BA, say an attempt by Richard Branson to bring further claims convinced BA it faced a resounding defeat.

Fears that the new information, detailing what BA code- worded its 'Mission Atlantic' to target Virgin, would spark anti-trust actions in the United States, prompted overtures to settle.

At the same time, BA insiders maintain, there was increasing concern at the undignified spectacle of Lord King, the BA chairman, having to undergo cross-examination from George Carman QC, Virgin's barrister.

However, it was the realisation that Virgin had secured detailed and incontrovertible evidence of BA's attempts to persuade Virgin's transatlantic customers to switch airlines, that forced BA's hand. It was then, said an adviser close to Virgin, that 'the floodgates really opened'.

Tomorrow, BA will apologise for libel arising out of Mr Branson's allegations that the airline was conducting a 'dirty tricks' campaign against Virgin. BA has agreed to pay more than pounds 500,000 in damages and all the costs of the case, estimated to be pounds 3m.

As his side of the bargain, Mr Branson is understood to have informed BA that provided its campaign completely ceases, he will not bring proceedings in the US, where the competition laws are much more stringent. 'If the leopard can be persuaded to change its spots, we won't do it,' said the Virgin insider.

Virgin, though, may continue to embarrass BA on this side of the Atlantic. Mr Branson is thought to be keen to put Article 86 of the Treaty of Rome, which deals with anti-competition issues, to the test before the European Commission.