George Galloway has claimed vindication after securing £150,000 in libel damages from the Daily Telegraph.

The newspaper had claimed the former Labour MP, who is set to stand as a Respect candidate in an East London constituency, had been in the pay of Saddam Hussein.

The judge said the newspaper, which also faces legal fees of over £1 million, had not given the MP the opportunity to read or respond to documents which were said to confirm his financial links to the Iraqi regime.

The court said the newspaper report had been "seriously defamatory".

Galloway described the Telegraph's claims as a "a dagger, a sword right through the heart of my political life".

Lawyers and Telegraph editors have warned, however, that the court's decision calls the public interest defence into question.

In its editorial, the Telegraph says that the judgment "should alarm all newspapers".