George Galloway has won £150,000 libel damages from the Daily Telegraph over "outrageous and incredibly damaging" allegations he was in the pay of former Iraqi dictator Saddam Hussein.

The independent MP for Glasgow Kelvin brought the action after allegations appeared in the paper in the aftermath of the fall of Baghdad.

But on Thursday a judge at London's High Court found the story to be libellous and awarded substantial damages.

Costs, expected to exceed £1 million, will also have to be paid by the newspaper.

Galloway said the decision was a vindication, but warned the more serious issue remained the decision to go to war in Iraq.

Following the court's verdict the paper said it would seek leave to appeal.

Defamatory

The judge said the Telegraph's allegations were "seriously defamatory" of Galloway.

He ruled the material had conveyed to readers that Galloway had been in Saddam's pay, that he diverted money from the United Nations oil-for-food programme and that what he had done was tantamount to treason.

"It was the defendant's primary case that their coverage was no more than 'neutral reportage' of documents discovered by a reporter in the badly-damaged foreign ministry in Baghdad, but the nature, content and tone of their coverage cannot be so described," the judge said.

In a statement outside the court, Galloway said he would continue to put forward his case against the war.

"The Daily Telegraph have been held to account, and what an account it has been," he said.

"But when is Tony Blair going to be held to account?

"When is Jack Straw and Geoff Hoon and all the other liars who led this country into such a  disaster as we are in, when are they going to be held to account?

"I intend to use my remaining breath to ensure that they are."

Ruin

The MP said he had risked "absolute and utter ruin" to bring the case, and could have been bankrupted and forced out of public office if he had lost.

"In those circumstances I don't feel in any way happy about the award of £150,000," he said.

"I feel angry that I have been effectively banished from the floor of the House of Commons for more than a year, nearly a year and a half."

Galloway was expelled from the Labour Party over comments he made about the war and subsequently established the Respect party.

A parliamentary investigation into his conduct has yet to report.