Revealed: High Court's MacIntyre transcripts

Accusations of blackmail, illicit sex and cocaine abuse surrounding the Elite model agency's libel action against a television investigative series are revealed in court papers which have been obtained by The Independent on Sunday.

The documents prompted a senior BBC producer to go to the High Court on Friday to try to stop publication of extracts from court transcripts giving details about the allegations. But Feisal Ali, who was accused of blackmailing witnesses on behalf of the BBC's television series, MacIntyre Undercover, was unsuccessful. Mr Ali faces being reported to the Director of Public Prosecutions for attempting to pervert the course of justice.

According to broadcasting insiders, Mr Ali's actions were pivotal in the BBC's decision to settle the case. The corporation was not keen to have the BBC's reputation for fairness and balance questioned in a highly publicised libel trial.

The court papers also contain accusations that the BBC selectively edited information on the exposé of the fashion industry, ignored its producers' guidelines on secret filming, made illegal recordings and sent researchers around the world to dig dirt on fashion industry executives.

The BBC strongly rejects and "categorically denies" all accusations of wrongdoing, denying anyone had been blackmailed or otherwise intimidated during the case, and isstanding by Mr Ali.

The modelling agency began its libel action against the BBC after the broadcast in 1999 of MacIntyre Undercover ­ a show fronted by the investigative reporter Donal MacIntyre ­ in which Elite executives were accused of sexually exploiting teenage models. The Elite film was one of four that were broadcast at a cost of £300,000 a show.

The BBC and Elite (which had been looking for £1.7m damages) reached an amicable settlement last Monday in which the BBC paid neither damages nor costs. The BBC had admitted that the undercover work "revealed no sexual exploitation", and in the joint statement had stated that Elite "warns and seeks to protect its young teenage models ... and that this was not reflected in the programme". The statement concluded: "In this respect, Elite was therefore unfairly portrayed."

Elite was forced to accept, however, that "sexual remarks made by some of its executives were clearly inappropriate".

But the amicable nature of the settlement hides the bitterness with which both sides fought the legal action. The court transcripts show senior BBC executives giving the go-ahead for journalists to go to Paris, Milan and Kiev to dig up information on Elite before the libel trial. The BBC claims this was for a follow-up programme on Elite if the corporation won the libel action.

The BBC claimed to have discovered evidence that Xavier Moreau, an Elite director ­ accused on the original programme of making apparently racist slurs ­ "received oral sex from a 17-year-old prostitute in the back of a limousine travelling into town from Kiev airport". Mr Moreau vehemently denied the incident.

But the BBC's case was largely undone by Mr Ali: he was taped by Fabio Bonazza, an Elite employee, allegedly blackmailing Mr Bonazza to give evidence against a more senior Elite executive. Mr Justice Eady, the judge in the case, said on reading a transcript of the tape: "It may not be blackmail but ... it looks jolly like blackmail."

But while the BBC was attempting to dig for further dirt on Elite employees, the modelling agency was attempting to ensnare its own prize catch ­ the presenter of the BBC's show. Donal MacIntyre himself became the target of a mudslinging counter-attack by Elite when he was alleged to have possessed cocaine in Milan.

But according to a BBC insider, Mr MacIntyre had undergone blood tests at regular intervals during the making of the programme. "We knew if it came to court we could prove he had never taken cocaine," said a programme insider. A BBC spokesman said: "Donal feels particularly strongly about the misuse of drugs."