LONDON: Britain's Daily Telegraph newspaper lost its libel appeal against maverick politician George Galloway yesterday over a story saying he had been "in the pay" of former Iraqi leader Saddam Hussein.
A High Court ruling in December 2004 ordered the paper to pay Galloway 150,000 pounds (US$267,200) for the accusation, which the politician had always denied.
Had the Telegraph succeeded in its appeal, Galloway would have faced a legal bill estimated at around 2 million pounds (US$3.56 million).
The newspaper based its story on documents it said it found in the abandoned Iraqi Foreign Ministry building in Baghdad after the invasion to topple Saddam in 2003.
The report claimed Galloway had received 375,000 pounds (US$667,500) a year in payoffs from the Iraqi Government.
"The Daily Telegraph did not at any stage seek to justify those defamatory statements as true," Sir Anthony Clarke said in dismissing the Telegraph's challenge yesterday.
"It defended the actions only on the basis of privilege and fair comment. The (original) judge rejected both defences.
"He was, in our judgement right to do so. It follows that the appeal on liability must be dismissed. We also dismiss the appeal on damages for the reasons given."
Neil Darbyshire, deputy editor of the Daily Telegraph, said they would consider launching another appeal at the House of Lords.
"Even though the ruling has gone in his favour, it is important to stress that Mr Galloway has not been 'cleared' of anything today," Darbyshire said in a statement.
"Neither has The Daily Telegraph been 'convicted' of anything. At no point in the judgment is The Daily Telegraph said to have been motivated by malice, or to have told any deliberate untruths."
The Telegraph had argued it had privilege against libel, saying it was in the public interest to publish the documents.
It used the so-called "Reynolds" libel defence which says information about which there is no assertion of truth could nevertheless be published due to public interest.
The flamboyant politician
Galloway, 51, was expelled from Prime Minister Tony Blair's Labour Party in 2003 over his outspoken opposition to the Iraq War.
Two years later, standing for the leftist Respect party, he overturned a Labour majority of more than 10,000 to win the parliamentary seat of Bow and Bethnal Green in one of the most bitter campaigns of last May's election.
The flamboyant politician was unable to react to the court ruling yesterday as he is currently appearing in the reality television show "Celebrity Big Brother" which prevents him from having contact with anyone outside the show.
Galloway has attracted widespread derision for his antics on the show, including impersonating a cat and robotic dancing in a skintight red leotard.
In contrast to the reaction to his appearance on the show, Galloway was hailed by the British media for the spirited defence he gave in May the US Senate Homeland Security and Government Affairs subcommittee investigating the UN oil-for-food scandal.
In Washington, Galloway insisted under oath that he had never benefited from any oil sales from Saddam Hussein and dismissed the subcommittee hearing as "the mother of all smokescreens."
He charged that it deflected attention from US missteps in Iraq including the decision to wage war against the country in the first place, charging that the US-led invasion was based on "a pack of lies."
However, Galloway may face a criminal probe by the serious fraud office, which has collected evidence linked to Iraq's oil-for-food scandal, a newspaper said yesterday.
The Guardian newspaper reported that a four-strong team from the fraud office returned from Washington with "thousands of documents" about the United Nations' affair, according to a source close to US investigators.
