NEWPORT West MP Paul Flynn yesterday agreed to pay libel damages over comments he made on endowment mortgages.

Mr Flynn was facing a writ for more than £300,000 in damages over comments on his website and in a magazine.

He settled the case by paying £1,000 damages and £35,450 costs and made a public apology for the "unjustified attack" on the claimants' integrity.

Company directors Nicholas Keca and Marianne Fitzjohn, both formerly of Gossington, Slimbridge, Gloucestershire, and former director Graeme Webber, formerly of Willgutter Lane, Keighley, Yorkshire, brought proceedings in London's High Court against the Labour MP.

The three were associated with Endowment Justice Limited, a company based at Bilston, West Midlands, representing people seeking compensation for the mis-selling of endowments.

The action related to a piece on Mr Flynn's website titled "Justice for some" and an article in Money Marketing magazine entitled "Endowment chasers are 'wolves profiting from misery'."

The directors' solicitor, Jo Sanders, said in the High Court that in February they were deeply distressed to see that Mr Flynn had referred on his website to companies which were out to "re-rob" victims of mis-selling by charging customers between 20% and 40% of any compensation received.

Ms Sanders told Mr Justice Eady: "Those may or may not be legitimate criticisms of some of the companies to whom the allegations were directed, but in this context the defendant also wrongly referred to Endowment Justice."

She said that Mr Flynn repeated substantially the same defamatory allegations to a journalist from Money Marketing magazine, which published his statements.

Ms Sanders said that all these allegations were completely false in respect of the claimants.

Neither Endowment Justice nor any of its directors were ever involved in any aspect of endowment policy selling.

Further, the company - which operated on a "no-win, no-fee" basis - charged its customers either 17.5 per cent plus VAT or 22.5 per cent plus VAT of any compensation gained.

She said that the charges were made clear to all potential clients and it was their choice whether to handle any claim themselves or to instruct the company to act on their behalf.

Outside court, lawyers said the damages and costs were donated to the NSPCC.

Speaking after the case Mr Flynn told the Argus: "I am proud of my success in this campaign against endowment mortgages and accept the necessity of settling at this time to avoid crippling financial costs." He said he has raised with the Speaker of the House of Commons the issues of strengthening insurance cover and the "need to redefine the protection that privilege gives MPs".