The Financier, Mr Roger Levitt, is to seek exemplary damages against the British Department of Trade and Industry over the "shambles" caused by a collapsed attempt to extradite him from the US, the High Court in London was told yesterday. Lawyers for Mr Levitt refused to drop further legal action arising from the case, even though the DTI has conceded the extradition proceedings were "misconceived" and were being dropped.

It was first disclosed in Parliament on Monday that attempts to extradite Mr Levitt, who spent some 12 days in custody in New York before being released on bail of $1 million (£656,771), were being abandoned.

But the disgraced financial services salesman still faces arrest should he return to Britain, where he is charged with misleading DTI inspectors over his links with a London boxing promotion company, International Boxing Corporation.