Ex-BBC chief may sue Campbell

Former BBC chairman Gavyn Davies may sue Alastair Campbell for defamation over his comments on the Hutton report, it was claimed today.

The Prime Minister's former spin chief declared victory within hours of Lord Hutton's verdict with a claim that Mr Davies had not told the truth about the David Kelly affair.

Mr Davies, who resigned hours later, is furious that this went well beyond Lord Hutton's criticism. He is said to be taking legal advice today on issuing a possible writ for defamation.

If the move, reported in The Times, goes ahead it will trigger a major courtroom showdown between two key figures in the Government's row with the BBC.

In a speech to the Foreign Press Association, Mr Campbell welcomed the Hutton report with the words: "What this report shows very clearly is ... the Prime Minister told the truth, the Government told the truth, I told the truth. The BBC, from the chairman and director-general down, did not."

Although Lord Hutton said reporter Andrew Gilligan's original allegations against Downing Street on the Today programme were "unfounded", he did not accuse either Mr Davies or director-general Greg Dyke of lying. Mr Davies, a former-Goldman Sachs economist and friend of Chancellor Gordon Brown, is said to regard Mr Campbell's attack on him as "unfinished business".

He is worth an estimated £120million so would have no problem hiring top lawyers.

The BBC's own legal advice, revealed in a 135-page document leaked yesterday, was that Mr Campbell had himself made "misleading" statements to MPs.