'Such judgment, such timing, such a plonker.' The curious case of John Major's libel action produced some unexpected bedfellows in defence of the New Statesman -- and in opposition to John Major's decision to sue the magazine over an article in our 29 January issue. Sun columnist Richard Littlejohn -- 'Irritant of the Year' in the What the Papers Say awards -- was one of the first signatories to our defence fund appeal. Last Thursday, in a reference to the Prime Minister's eleventh-hour decision to take the £1,001 paid into court by the New Statesman, Littlejohn's column was headed '1001 reasons why you are such a plonker, John'.

He was not alone in his view. Leading libel lawyer Mark Stephens was quoted at length in the Daily Mail: 'It's a disaster for Major. He has performed a tremendous climbdown. The New Statesman has wiped the floor with him.' In the Sunday Times, Alistair Brett, company solicitor of Times Newspapers Ltd, wrote, 'John Major has bottled out. His decision to accept derisory damages against the New Statesman is itself derisory.' Even the Economist said we had 'outwitted' Major.

Yet triumphalism is not the mood here. The Prime Minister's decision to take the money rather than appear in the witness box is indeed a moral victory, a vindication of our right to have published the article, 'The curious case of John Major's "mistress"'. He received no apology, no admission of defamation, no retraction; we are free, were we so minded, to republish the 'offending' article.

But the New Statesman has been left with bills totalling £250,000, principally as a result of the out-of-court settlements with our printers, distributors and major wholesalers. These alone cost almost £150,000, including the payment of damages of £26,500 to Major and £31,500 to the caterer, Clare Latimer. Because of the indemnities all publications are required to give to those who handle them, the bill for these settlements came back on us -- even though we had no control over them.

Suing third parties is truly a Maxwellian tactic, as the New Statesman chief executive Pat Coyne commented early on in the case -- to the intense displeasure of the Prime Minister and his lawyers, who cited it in their 'Statement of Claim'. Hitherto restricted to the likes of Robert Maxwell, who used it as a means of suppressing stories and targetting publications that were hostile to him, John Major has now given the green light to every would-be gold-digger or vexatious litigant to employ the same tactic. Those companies that settled so hastily with the Prime Minister may come to repent their decision at leisure. They must now surely join the campaign to limit libel actions to the authors and publishers of an article -- a proposal that was this week the subject of an Early Day Motion in parliament.

Now that the dust has settled, it is worth recapping on an issue that has been the subject of such gross misrepresentation and distortion that at times we have despaired of accurately communicating the content and intent of the original article to those who have not had the opportunity to read it themselves.

The story begins with John Major's election as Tory Party leader in 1990. Within days of his taking over from Margaret Thatcher, the Westminster gossip machine had already gone into overdrive with rumours of a supposed 'affair'. Some senior political journalists went so far as to suggest a deliberate attempt by disgruntled Thatcherite backbenchers to smear and undermine the new PM. Some even suspected secret service involvement in the rumour-mongering.

That in itself would have been sufficient justication for serious journalistic enquiry. Instead, paper after paper devoted immense resources to trying to stand up the false rumours. We detailed those efforts -- some of them by respected investigative reporters who would not normally be seen dead in pursuit of a sex scandal -- in our 29 January issue. 'What is objectionable about the rumour-mongering and speculation,' we wrote, ' . . . is not so much the fact that journalists have carried out investigations to try to discover the truth behind the gossip as that, having come up with no evidence to justify publication, some of them have gone ahead with the sort of behind-the-hand sniggering that is more poisonous and more damaging than open discussion and disclosure.'

The false rumours about Major and Clare Latimer comprised something more than the usual hothouse rumour-mongering to be found in Westminster political and media circles. For a start, there was that suggestion of an organised smear. Then there was the fact of their longevity. And finally, as we detailed at length on 29 January, there was the fact of their appearance in oblique and not-so-oblique references in just about every newspaper in the land and on television programmes such as Spitting Image.

The rumours had also had a serious effect on the business of government -- to the extent that a contingency plan had been drawn up during the last election, for implementation if a whiff of this pseudo-scandal made it into the pages of the press during the election campaign. That plan was triggered when news of the the New Statesman article swept through the Westminster lobby on Wednesday 27 January. Before anyone had had the opportunity properly to consider the article -- and certainly before Major himself had even seen it -- Number Ten's deputy press officer had issued official denials of an allegation that our article was certainly not making.

It was a different sort of article, in a different sort of magazine, in wholly different circumstances to what had been envisaged by the election-period contingency plan. But once the first buttons had been pressed, events proceeded with a grim, irrevocable illogic.

That evening, the Prime Minister's press secretary, Gus O'Donnell, took the extraordinary step of issuing a second, on the record, denials of the allegations that weren't being made. That gave the papers the way in they had been looking for. 'MAJOR FURY OVER MISTRESS SMEAR: He TWICE denies affair with No 10 cook,' as the Daily Mirror front page put it. Inside was proof of how well-prepared the tabloids were for when the "tory' broke: the Mirror had a double-page spread featuring and interview and photographs of Clare Latimer done many months previously.

'If it hadn't been for those denials, we would never have touched it,' the Mirror's editor, David Banks, told me later. When, in the Sun's words, the 'writ hit the fan' the next day, every newspaper in the land was given the go-ahead to run with the story.

The Times made the point clearly: 'April 1991: Private Eye (average readership 822,000) notes the rumours.

1992: The London Evening Standard (readership 1,256,000) wonders why Clare Latimer is getting so much attention. The Sunday Times (3,652,000) features Clare Latimer in its A Life in the Day. The Guardian (1,293,000) diary asks: "What can it all mean?"

27 January 1993: Steve Platt, editor of the New Satesman (estimated average readership 107,800), puts the latest edition of his redesigned weekly to bed.

28 January: The story of Mr Major's denial of any illicit affair is run in the Daily Express (3,965,000), the Daily Mirror (9,859,000), the Sun (10,021,000), the Guardian (1,293,000) . . . ' And so on. None of these papers, although they also repeated the rumours, were sued.

Major could still have emerged from this case with credit had he accepted the early statements of clarification -- and of regret for any 'personal distress' caused -- made by the New Statesman in the next few days. He dismissed these as wholly inadequate, insisted upon a full retraction, apology and 'substantial damages'. The action continues 'until the defendants take a realistic view of this matter,' said the statement issued through his lawyers.

It was his second error of judgment. In the end, fearful of facing us in court, he was compelled to accept an almost-derisory sum -- and no apology or retraction -- five months later. An action that need never have been commenced, should never have been commenced, was ended with even his supporters shaking their heads in disbelief at yet further evidence of his possession of the Midas touch in reverse, whereby everything he touches turns to dust.

Meanwhile, the New Statesman is left facing a huge bill for an article which has never been found to be defamatory.