FROM way back, there were nothing but negative vibrations in it for Fine Gael and the Labour Party. If the leader of Democratic Left had won his libel action against the Sunday Independent and Eamon Dunphy, it would have done nothing to improve the Government's chances of re election; if he lost, it could damage the prospects for a pre election pact.

When the crunch came, the jury rejected part of the case made on Mr De Rossa's behalf; failed to agree on another and was discharged. In the circumstances, it could be regarded as a legal disagreement in favour of the Sunday Independent.

The decision fell like a thunderbolt on Leinster House, where politicians of all parties had regarded it as an open and shut case, the only real issue to be the amount of costs. But to fall short of the single penny awarded to Albert Reynolds in London was desperate. And to leave a question mark hanging over Mr De Rossa's probity was something of a political disaster.

As the jury failed to agree that the words used by Mr Dunphy meant the Minister "was involved in or tolerated serious crime", an embattled Mr De Rossa fought back. Recalling the defence offered in the case, he was "very pleased the Sunday Independent have made it clear that they do not consider me to be a criminal in any sense, or indeed that I tolerate crime in any sense or in any way". And a retrial threatened when he declared: "I will insist and ensure that this matter is brought to a conclusion."

The idea of a retrial being held in the very jaws of a general election is enough to give Fine Gael and the Labour Party the heebie jeebies. But that is unlikely to happen because of normal court delays. Party sources saw no reason why yesterday's decision should affect Government business or prevent agreement on a preelection pact.

Fianna Fail and the Progressive Democrats were hugging themselves over the unexpected outcome. It was a real bonus in election terms. Mr De Rossa had failed to win his case and was politically damaged. But, in public, they held their peace.

THE alleged libel was committed shortly after a general election, during the dog days of December, 1992.

The Labour Party was negotiating with Democratic Left about a possible left of centre coalition arrangement with Fine Gael. Fine Gael was holding out for a right of centre deal involving Labour and the PDs. The parties postured and posed; DL lost a recount in Dublin South Central and dropped out of contention. Then Albert Reynolds nipped in with an offer the Labour Party could not refuse. The first Fianna Fail/Labour Party government was born.

Meanwhile, Mr De Rossa was looking for an apology and a retraction for what had been written about him in the Sunday Independent. He also asked that money be given to charity. His requests were refused and he instituted libel proceedings.

He told the first, aborted, High Court hearing, last November: "One of the things that upset me most was the fact that if this were let stand I would never be able to defend myself again as an honest person ... Here was a man [Mr Dunphy] and the Sunday Independent saying I was not fit to be part of the Government of this State."

As for being linked to armed robbery, and "associated with prostitution and drugs dealing and all that kind of stuff, was sick, as far as I was concerned, and it was a deliberate attempt to destroy me", Mr De Rossa said.

On joining the Rainbow Coalition, Mr De Rossa advised both Mr Bruton and Mr Spring about his pending libel action. But there was no question of his calling it off, or their asking him to do so. Mr De Rossa is a determined man. Once the Democratic Left leader makes up his mind he is not for turning. The word "stubborn" is an inadequate appellation for his singlemindedness.

It wasn't just a matter of clearing his own name. There was a larger agenda at stake. Mr De Rossa and his colleagues within DL regarded the assault on his character as an indirect attack on the party. If Mr De Rossa was not fit to be a member of Government, then his party might also be portrayed as "unclean", tainted by sins from the past.

In the course of the recent trial, Pat Rabbitte took the view that a political agenda underlay publication of the article by the Sunday Independent and that it represented a deliberate attempt to keep DL out of government.

The party leader has already suffered some measurable damage. In the aftermath of the aborted libel action and the attendant publicity last November, Mr De Rossa's public satisfaction rating dipped sharply. It took months to recover, while his party remained stuck at 1 per cent.

Last night, members of DL gathered in Dublin to celebrate the fifth anniversary of the party's founding. In the circumstances, it was something of a wake. Some had feared the party leader might win a Pyrrhic victory in the courts: securing a positive verdict, but being awarded derisory damages. But they did not even get that. The jury is effectively still out over the alleged libel and Mr De Rossa's fitness to serve in government. The impact of yesterday's legal muddle has yet to be measured in political terms.