A university has dropped a libel suit against a Conservative MP who criticised it for maintaining commercial links with the oppressive Libyan regime.

In March Robert Halfon, MP for Harlow in Essex, published a blog post about Liverpool John Moores University (JMU) and its investments from Libyan sources.

Mr Halfon, the grandson of a Libyan Jew who escaped the country in the 1960s following anti-Jewish pogroms, has been at the forefront of parliamentary calls for an inquiry into the funding of British universities by authoritarian Middle Eastern regimes.

After he was threatened with libel action by JMU lawyers, he agreed to remove the post but they demanded that he also offer an unqualified withdrawal and promised not to repeat the claims. They also called for a donation to the university and for Mr Halfon to pay its legal costs for the case.

Mr Halfon refused, raising the possibility of an expensive and drawn-out libel suit.
His lawyer, David Allen Green of Preiskel & Co, said the threat was "illiberal, confused, and misconceived".

The university never denied taking money from the Libyan regime, but argued everything was done transparently and with the backing of the Foreign and Commonwealth Office.

However JMU has now announced it is dropping the case.

Mr Halfon welcomed the decision. "I am a firm believer in freedom of speech and people must have the right to express views even if they are unpalatable to some," he said.

He called on universities to be careful as to which regimes they took money from and added: "I hope that universities who have had dealings with Libya and similar autocracies in the Middle East will think again before signing contracts or taking money."

John Kampfner, the CEO of Index on Censorship, said the libel threat against Mr Halfon raised questions on the need for reform of the British legal system. "That an MP cannot raise issues of immense public interest or safety without feeling the chill from our libel laws is indicative of how dreadful they are.

"The government has committed to reform to protect freedom of expression, but it must ensure the potential for once in a generation reform is not wasted."