By Dominic Ponsford
The Daily Telegraph is facing a legal bill for around £1.5 million plus £150,000 damages after opting to stop its long-running legal fight with George Galloway.
In January the Court of Appeal upheld an earlier High Court ruling that the Telegraph had libelled the MP after claiming he took oil bribes from Iraq.
The Telegraph will now have to pay up £150,000 in damages to the Respect MP. Costs for both sides, which the Telegraph will have to pay, have been estimated at £1.5 million.
Telegraph lawyers have been weighing up whether to appeal the case to the House of Lords.
The Galloway versus Telegraph legal battle dates back to April 2003 when reporter David Blair found documents in the Iraq foreign ministry that alleged Galloway had received payments of more than £375,000 a year from the Saddam Hussein regime.
The paper had called Galloway a "greedy crook" who used Hussein’s cash to fund a luxury lifestyle.
The Telegraph used the "Reynolds" libel defence of qualified privilege – not that the allegations were true, but that the paper was responsibly reporting on a matter of public interest.
Sir Anthony Clarke, Appeal Court Master of the Rolls, ruled that the newspaper’s embellishment "with relish" of allegations against Galloway, contained in the Baghdad documents, was fatal to this defence.
The Telegraph has noted that the Court of Appeal has not challenged the authenticity of the documents on which the original story was based.