A CITY university has threatened an MP with libel proceedings – after he accused it of “accepting millions” from Libyan dictator Colonel Gaddafi.

The Daily Post can reveal Liverpool John Moores University could be heading for a High Court showdown with outspoken Conservative MP for Harlow, Robert Halfon.

The university has issued a formal libel threat against the MP over what it sees as damaging remarks he made on his blog over its links with Libya.

Last night the university said it had “a right to defend” its reputation but Mr Halfon’s lawyers said they would “fully defend” what they said amounted to “fair comment”.

The row came as legal experts told the Daily Post the cost of the case could stretch into “hundreds of thousands” and take almost two years to be heard should it get to trial stage

The legal threat surrounds comments made by Mr Halfon including a blog entry he wrote on March 4 which states: “JMU also accepted millions from Gaddafi in return for specified contracts.”

He also spoke out in Parliament, which is exempt from libel laws, to “condemn the extensive financial links between Colonel Gaddafi and at least two British universities, the London School of Economics (LSE) and Liverpool John Moores”.

And he also stated in Parliament: “Some of our universities, like the LSE, have been prostituting themselves to Middle Eastern despots for blood money.”

In January last year, JMU announced a contract with the Alfateh Medical University, in Tripoli, which it said “takes the university’s total contracted business in Libya to £1.272m”.

But the university insist the partnership never got off the ground and the only project it has undertaken in Libya to date was a 10-day short course with the total amount received less than £15,000.

Now the university has issued a formal libel threat to the MP warning he faces legal action unless he issues a public apology and pays substantial damages to a Libyan charity.