The Sunday Independent has said it will sue Mr Joseph Murphy jnr if he refuses to refund the newspaper almost €70,000 in libel damages which it said he "fraudulently obtained" from it.
Mr Murphy received the sum in an out-of-court settlement after he accused the paper of libelling him in an article, published in May 1998, that said he had given at least €30,000 to Mr Ray Burke at the former minister's home in north Dublin.
The Flood tribunal interim report, published last week, found that despite Mr Murphy's claims to the contrary, such a transaction did occur, that it amounted to a "corrupt payment", and that "all present at the meeting were aware that it was such".
On its front page yesterday, the Sunday Independent said that in light of the findings, it was withdrawing an apology it made to Mr Murphy in July 2001 as part of the settlement reached in High Court proceedings.
"We hereby withdraw our apology to Mr Murphy. We will be taking urgent steps to recover from him all money paid to him by us, together with our legal costs, interest and damages," it said, adding it had paid damages and costs of €67,000 to the builder.
A spokesman for Independent Newspaper Group confirmed: "We will be looking for the return of monies and if they are not forthcoming we will sue for them."
The company is also to apply to the High Court to have two other claims by Mr Murphy pending against Independent Newspapers to be struck out as "an abuse of process".
Mr Michael Roche, the group's managing editor, said that Mr Murphy had "abused the process of the courts and he unjustifiably called into question the integrity of Sunday Independent journalist Liam Collins. In effect, he sued us for telling the truth".
