New newspaper row as judge refers tabloid to attorney general

Chequebook journalism was back in the dock last night after a £10,000 payment by the News of the World to a convicted criminal ended the trial of five men accused of plotting to kidnap Victoria Beckham.

Directing the jury to return not guilty verdicts, Judge Simon Smith referred the paper to the attorney general, Lord Goldsmith, for investigation.

The collapse of the trial threatens to derail the newspaper industry's carefully crafted attempts to see off statutory regulation. It is also a blow for Rebekah Wade, now editor of the Sun, who printed the kidnap story when she edited the NoW. Earlier this year she admitted to a Commons committee that, while she was editor, the NoW paid police officers for information.

While the paper stood by the Beckham story and the methods employed to secure it, Sir Christopher Meyer, chairman of the press complaints commission (PCC), said the collapse of the trial raised "a number of significant issues".

The case began last year when an investigation by the NoW's award-winning undercover reporter Mazher Mahmood led to the arrest of four Romanians and a Kosovan in a dramatic "sting" on November 2, a Saturday. The operation was filmed by the newspaper and broadcast on the same evening's television news bulletins. The story was splashed across the NoW the next morning.

It was claimed the men planned to kidnap Victoria Beckham and her two young sons and hold them to ransom. But at yesterday's hearing, lawyers for the defendants claimed their clients had been the victim of a "set-up".

When the crown prosecution service said it would offer no evidence against them, Adrian Pasaraneu, 27, Alin Turcu, 18, and Luzim Balliu, 30, were formally cleared of conspiring to kidnap Mrs Beckham on or before November 2 last year. Two other men were also acquitted of the same charge but cannot be named for legal reasons.

Brian Altman, prosecuting, said the NoW was alerted to the Beckham story by an informant, Florim Gashi, a 27-year-old Kosovan parking attendant.

Gashi, a convicted criminal, had worked with the paper before, tipping them off in August last year about a female parking attendant who was allegedly dealing in drugs. But a review of that case raised concerns about Gashi, the court heard yesterday. "In a police interview, the woman said Gashi had set the whole thing up and given her a wrap of heroin," Mr Altman said.

In the light of this, prosecution lawyers then reviewed the Beckham case and discovered the NoW made three payments totalling £10,000 to Gashi last autumn. The newspaper said it had passed its evidence to police but it was unclear yesterday at what stage prosecutors discovered that Gashi had been paid.

One of the defence lawyers, Roy Amlot QC, told the court that the case highlighted the "dangers involved in tabloid newspapers handing over their own investigations to the police at the last minute".

Martin Hicks QC, representing Pasaraneu, said of his client: "He has been the victim of a set-up by Mr Mahmood and his associates, on the face of it designed to further Mr Mahmood's notorious career and improve the circulation of a tabloid newspaper by offering financial gain to others."

After a spate of cases involving payments to witnesses, the lord chancellor, Lord Irvine, proposed to outlaw them. In 1999, the NoW promised £10,000 to Allison Brown, a witness in the trial of Gary Glitter for indecent assault, with the prospect of £25,000 more if he was convicted. Last year several newspapers offered seven teenagers up to £10,000 for stories about the teacher Amy Gehring, who was accused then acquitted of having sex with under-age pupils.

But Lord Irvine agreed to shelve his plans when the press complaints commission agreed to toughen up its voluntary code.

The News of the World said it was "surprised and perplexed" by the collapse of the case. "We fully stand by the report. The story resulted from a thorough and legitimate investigation undertaken by one of the paper's most senior and experienced reporters, a journalist responsible for more than 100 successful convictions."