No action on City 'blackmail'

The City of London police have confirmed they are to take no action on blackmail allegations made by Terry Smith, chief executive of stockbroking firm Collins Stewart, against former employee James Middleweek.

The decision comes after advice from the Crown Prosecution Service, which also decided no action could be taken against Mr Middleweek's employment lawyer, Dale Langley.

Mr Smith had lodged the blackmail complaint after a meeting, which was secretly taped, between Mr Middleweek, Mr Langley and representatives of the stockbroking firm Collins Stewart.

They centred on a claimed report into the firm's business practices which it was alleged would be "stuck in a file and go nowhere" if £2.4 million were paid.

Collins Stewart said: "Due to the seriousness of the allegations and following legal advice, the board of Collins Stewart believed it was obliged to notify the matter to the City of London Police."

Despite blackmail charges being dropped, the stockbrokers "vigorously denied" the allegations made by Mr Middleweek.