Virgin set to win BA libel battle

Although neither side would comment last night, Virgin and Mr Branson are expected to emerge with damages running into six figures, payment of costs put at pounds 1m and an apology from BA.

Initially the case had been expected to last at least 12 weeks. In the past month, however, it has become apparent that the matter would be settled with a short agreed statement to be read out in court on the first day of the case.

There is speculation that part of the agreement may be an undertaking by Virgin not to launch any other related proceedings against BA in the US courts.

The libel battle arose out of allegations made by Virgin 13 months ago that BA was conducting a 'dirty tricks' campaign designed to undermine it, involving smear stories in the press and the poaching of Virgin passengers.

Mr Branson sued BA and its chairman Lord King after BA said Virgin had fabricated the claims to get publicity. BA immediately issued a counter-writ, claiming Virgin's allegations were libellous.

John MacGregor, Secretary of State for Transport, and Sir Colin Marshall, BA's chairman-designate, yesterday launched a joint attack on the refusal of the US and some European countries to open their air markets to greater competition. Speaking at an international seminar in Brussels, they criticised the US for its restrictions on foreign ownership and EC member states for subsidies paid to state-owned flag carriers.