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The billionaire British peer Lord Ashcroft will have to publicly counter accusations that he made loans to a corrupt Turks and Caicos Islands politician after a High Court judge in London on Monday decided that he should have to reply to the allegations.

Lord Ashcroft

Mr Justice Eady’s decision is the latest development in a “long and tortuous” legal battle between Ashcroft and the former owners of Britain’s Independent newspaper.

According to The Independent, Ashcroft is seeking damages in a libel action against Independent News and Media (INM), the paper’s former editor Roger Alton and reporter Stephen Foley, claiming he was libelled in two articles in November 2009.

On Monday, Mr Justice Eady decided that, as well as defending its claim on the grounds of responsible journalism in a matter of public interest, INM could also use the defences of fair comment and justification: that the story was truthful, The Independent reported.

Legal sources told The Independent that the decision would mean that Ashcroft would most probably be expected to undergo cross examination in court and produce private documents which have not previously been subject to public scrutiny.

“The next stage will be for a reply to be served (by Lord Ashcroft) and, in the light of that, disclosure of documents,” Mr Justice Eady said in his decision.

The original articles, which relate to the peer’s business dealings in the Turks and Caicos Islands, appeared three months after Britain imposed direct rule and removed its premier, Michael Misick, who was accused of benefiting from improper sales of Crown land and taking bribes from developers.

INM’s case at a recent Court of Appeal hearing was that Ashcroft knew companies he controlled were doing business with corrupt politicians but did nothing to stop it – that he knowingly profited from “a culture of immorality”, The Independent reported.

Mr Justice Eady said the case centred on two payments amounting to almost $10 million made to Misick as loans.

“The case against the claimant is that he authorised this arrangement without ever intending that there should be any repayment and the he did so knowing that Mr Misick was corrupt, with a view to obtaining influence and commercial benefits,” Mr Justice Eady said.

Ashcroft’s lawyers argued in a previous hearing that the paper’s allegations were so “garbled and unclear” that it would be unfair to expect him to answer them. Mark Warby QC said they were so vague that they were impossible to refute.

But Mr Justice Eady said at a hearing on 20 July: “I believe that it did finally emerge sufficiently clearly what the defendants intend to allege.”

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