Mulroney `is vindicated'

Following an unprecedented apology from the Royal Canadian Mounted Police yesterday, lawyers for the former Conservative prime minister Brian Mulroney claimed that their client had been "completely vindicated" of all accusations that he had profited from kickbacks in connection with the purchase of 34 airliners from Airbus Industrie by Air Canada during his term of office.

The apology and an agreement to pay the former prime minister's legal expenses brought to an abrupt end what had been expected to be the most sensational libel trial in Canadian history.

Mr Mulroney had launched a C$50m (pounds 21m) libel suit against the Canadian government within hours of a leak in November 1995 that he and a former political associate, Frank Moores, a onetime premier of Newfoundland, were targets of an international criminal investigation involving the C$1.8bn purchase of the Airbus 320s in 1988.

Also targeted in the investigation was Mr Moores's business partner, Karlheinz Schreiber, a German-Canadian.

The Mounties alleged that Mr Moores and Mr Schreiber had received illegal commissions from Airbus Industrie based on their influence with Mr Mulroney and at least C$5m of those commissions had been turned over to the former prime minister.

The investigation became public when the contents of a letter from the Canadian Department of Justice to the Swiss government containing the allegations appeared in a Toronto business newspaper.

The letter was seeking Swiss assistance to freeze and examine Swiss bank accounts held by Mr Moores and Mr Schreiber.

Protesting his total innocence, Mr Mulroney commenced the civil proceedings and used the power of subpoena to counter the criminal investigation.