The Sunday Times was forced into a humiliating climb-down at the High Court yesterday over its allegations that Michael Foot was considered an "agent of influence" by the KGB.
The 81-year-old former Labour leader had sued the paper and its proprietor Rupert Murdoch over a three-page article last February, which - under the headline "KGB: Michael Foot was our agent" - detailed how the KGB had courted Labour politicians and trade union officials during the Sixties.
The story alleged Mr Foot had operated under the codename "Boot" and that the Soviet intelligence service made cash payments to the left-wing journal Tribune while he was editor.
Under a settlement read out in open court, the paper offered Mr Foot "substantial" damages - which with legal costs are believed to run to at least pounds 100,000 - and an assurance that it had never intended to suggest that he had been a spy.
Mr Foot, who was in court for the brief hearing, said afterwards: "I think the libel laws are very severe on newspapers ... But what the Sunday Times said was so serious - that I was a spy who had served one of the most wicked organisations that has existed this century - I thought it had to be wiped clear."
His solicitor David Price said that Times Newspapers' unsuccessful attempt to prevent Mr Murdoch from appearing in court had prompted the company's decision to reach a settlement. Mr Foot added: "If he [Mr Murdoch] owns newspapers which can make accusations of this nature, he should appear in court when they are raised."
The original allegations about Mr Foot and several trade unionists were contained in a manuscript of the Soviet defector Oleg Gordievsky's memoirs Next Stop Execution, bought by the Sunday Times last September for serialisation. Mr Gordievsky's publisher, Macmillan, was reluctant to risk naming Mr Foot without any supporting evidence. When the Spectator magazine unmasked another name on Mr Gordievsky's list - that of Richard Gott, then literary editor of the Guardian - last December, the Sunday Times feared its prize serialisation would be trumped.
In need of corroboration, John Witherow, the newspaper's editor, dispatched a reporter to Moscow, where interviews were conducted with several former KGB officers, including Mikhail Lyubimov and Viktor Kubeykin.
However, Mr Lyubimov later told the Independent that to suggest Mr Foot had been an agent was "a ridiculous smear", while Mr Kubeykin called the Sunday Times article "a 100 per cent distortion" of what he had told the reporter.
On the day the story appeared, Mr Witherow admitted on BBC Radio that the allegation that Mr Foot was an agent might be "utter rubbish", adding that the Sunday Times was merely suggesting that the KGB believed he was an agent. Mr Foot immediately fired off writs to the Sunday Times and News of the World, which printed a follow-up story, branding the allegations "a McCarthyite smear".
The News of the World settled within hours of the writ arriving, paying Mr Foot pounds 35,000. Mr Witherow, however, chose to fight on and at one point staked his job on victory in court.
Fred Halliday, a Professor at the London School of Economics, also named by the Sunday Times, may now proceed with legal action. Mr Foot said some of the damages would go to Tribune. He added he and his legal team would celebrate at the Gay Hussar, the Soho restaurant in which alleged Agent Boot met his KGB contacts.
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