Peer vs peer as Archer tells Nicholson: 'Take it back or face the consequences'

Is it possible to libel a man with 'no reputation left to sully'? Robert Mendick reports on an ever more bitter feud

Lord Archer is threatening to sue Baroness Nicholson, the eminent peer, claiming that she has defamed him.

The threat of a lawsuit is contained in a letter sent by Archer's wife Mary to the Liberal Democrat peer, Euro MP and special envoy to the World Health Organisation.

Lady Archer revealed the existence of the letter, the latest salvo in a dispute between the two women, last week. Its contents have remained a secret until now.

But it is understood to contain a veiled threat of a libel action unless Baroness Nicholson apologises for accusing Archer of "misappropriating" charity funds.

But legal experts said last night any case brought against her was doomed to failure, because Archer, a convicted perjurer and serial adulterer, has almost no reputation left to sully. One lawyer said it would give libel litigants a bad name.

The multi-millionaire novelist was convicted of perjury and perverting the course of justice and sentenced to four years in prison because of lies originally told in a libel court.

The dispute between the two ladies arises out of Baroness Nicholson's call for police to investigate the whereabouts of millions of pounds said to have been raised by Archer on behalf of Kurdish refugees in northern Iraq in 1991.

The subsequent police investigation found no evidence of criminal wrongdoing in Archer's fundraising.

Baroness Nicholson's complaint also prompted an independent inquiry by auditors KPMG which concluded that although no money was misappropriated the final figure raised of £31.5m – or £57m depending on conflicting claims – could not be "fully supported by documentation". KPMG staff interviewed Archer in jail and he was "unable to recall the breakdown of the £31.5m".

Lady Archer has accused the baroness of "kicking her husband in the teeth". Baroness Nicholson, for her part, has refused to criticise Lady Archer because "she is a woman whose husband is in jail".

Last week, Lady Archer told Radio 4's Midweek audience she had sent the letter and was now demanding a public apology and retraction.

The letter, it now appears, also accuses the baroness of defaming Archer and demanding an immediate and satisfactory response.

Lady Archer blames Baroness Nicholson's complaint for delaying her husband's transfer to a comfy, open prison. Last week, she went, once again, on the public offensive.

"She took a free kick too far when Jeffrey was in no position to defend himself," Lady Archer told the BBC. "He spent eight weeks cooped up in Wayland [a medium security jail]. She made a public statement making a song and dance about the allegations. Now she should make a public retraction."

Contacted at the family home in Grantchester, Lady Archer refused to discuss the letter any further. "I think I have said what I want to on that subject," she said, "I think I said it fairly clearly."

Baroness Nicholson was also staying tight-lipped. She released a terse statement in which she pointedly refused to make any kind of retraction.

Such reticence was in stark contrast to a previous interview with the IoS. When Lady Archer launched her first broadside last year, Baroness Nicholson replied: "It is of no concern to me at all. She is a woman whose husband is in jail. Who am I to criticise her for that?

"She has got trouble with her son as well. She is a lady with problems and if it makes her feel better to attack me then that's fine. My work is serious. To me the Kurds are the victims of the Archers."

While she is showing little sympathy for the novelist's wife, Baroness Nicholson is understood to be perturbed by the contents of the letter and fears that Archer may pursue a claim regardless of its high chance of failure simply because he has the money to do so. Jeffrey Archer and Emma Nicholson were one-time colleagues at Conservative Central office. Archer was thrown out of the party while Mrs Nicholson quit to join the Liberal Democrats. She was made a life peer in 1997.

Amber Melville-Brown, a leading libel lawyer, said last night: "He has not got a reputation in terms of honesty. I would very much doubt Jeffrey Archer could therefore win that kind of a libel action. What reputation does he have left to be damaged?

"There are numerous honest claimants worthy of the protection of libel law. It is unfortunate that Jeffrey Archer, who perjured himself in a libel court, may give legitimate claimants a bad name."