A drugs trial involving the singer Tulisa Contostavlos has collapsed dramatically after a judge ruled that it was likely the Sun's veteran investigative reporter Mazher Mahmood had attempted to persuade a witness to change his evidence and then lied about it under oath.
The damning comments by Judge Alistair McCreath both vindicated Contostavlos – who insisted she was entrapped by the reporter into promising to arrange a cocaine deal – and potentially brought down the curtain on the long and controversial career of Mahmood, better known as the "fake sheikh" after one of his common disguises.
Mahmood made his name with the News of the World, often dressing up as a rich Arab to persuade the famous, gullible or criminal to divulge their secrets on tape via elaborate subterfuge. He has been suspended by the Sun pending an investigation.
The Sun faces a significant bill for court costs, to be determined at a later date, and it is possible that Mahmood could be tried for perjury.
McCreath dismissed the jury a week into the trial at Southwark crown court after concluding that Mahmood had falsely denied, during a pre-trial hearing, that he had pressured his driver about evidence which showed that Contostavlos was opposed to drug use. Mahmood changed his account during cross-examination on Thursday.
There were "strong grounds for believing Mr Mahmood told me lies" about his dealings with the driver, Alan Smith, the judge said. He added: "Secondly, there are also strong grounds for believing that the underlying purpose of these lies was to conceal the fact that he had been manipulating the evidence in this case by getting Mr Smith to change his account."
Contostavlos grinned broadly in the glass-walled dock as McCreath explained that had he known about Mahmood's actions before the trial he would have granted a defence application to have the case thrown out. He said: "And that is why I have now said, armed with the knowledge I now have, that this case cannot go any further."
As the jury filed out, the 26-year-old former X Factor star stood up and hugged her friend and co-defendant, Michael Coombs, a rapper with the stage name Mike GLC. Coombs had pleaded guilty to supplying about £800 of cocaine to Mahmood, a deal allegedly brokered by Contostavlos, but these charges were also dropped.
Weeping, she then hugged relatives and supporters. Her lawyer embraced the singer, telling her: "It's over now."
Outside court a nervous-looking Contostavlos condemned "horrific and disgusting entrapment" by Mahmood and the Sun on Sunday, which published the front-page story in June last year with the headline "Tulisa's cocaine deal shame".
She said: "Mahmood has now been exposed by my lawyers openly lying to the judge and jury. These lies were told to stop crucial evidence going before the jury."
Smith had been "pressurised to change his statement to strengthen Mahmood's evidence", Contostavlos said, adding: "Thankfully, the lies have been uncovered and justice has been done."
The collapse of the trial is a catastrophic result for Mahmood, a paradoxical figure who relishes his high profile while also taking extraordinary measures to avoid being photographed. He was allowed to give evidence in court behind a screen, a courtesy previously extended when he spoke before the Leveson inquiry.
The official explanation is that Mahmood needs to protect his identity from the criminals jailed due to his stories over the years – he claims a tally of more than 100 – though there is also an element of preserving a sense of mystique.
A Sun spokesman said the paper took the judge's remarks "very seriously" and had suspended Mahmood. The spokesman added: "We are very disappointed with this outcome, but do believe the original investigation was conducted within the bounds of the law and the industry's code. This was demonstrated by the CPS decision to prosecute."
Mahmood gained access to Contostavlos by posing as a wealthy Bollywood film producer interested in casting the singer as the lead in a major film, purportedly opposite Leonardo DiCaprio and for a supposed fee of more than £3m.
The singer was flown to Las Vegas for meetings with Samir Khan, the role played by Mahmood, and his associates. She was then dined by Mahmood at London's Metropolitan hotel.
In her defence, Contostavlos claimed she was talking about drugs because she was playing up to the part she was led to believe the producers wanted.
Speaking outside court she said: "Mahmood got me and my team completely intoxicated and persuaded me to act the part of a bad, rough ghetto girl. They recorded this and produced this as evidence when I thought it was an audition. It was a terrible thing to do."
After the meal in London, Contostavlos was driven home by Smith and told him that she had seen the terrible impact of drugs and did not approve of them – a conversation he recounted to police.
At a pre-trial hearing at the end of last month Mahmood denied discussing that statement with Smith, particularly whether the anti-drugs comments might undermine the case.
Under cross-examination on Thursday, Mahmood conceded that he had in fact received an emailed copy of the statement three days before the pre-trial hearing and had spoken to Smith about it.
This prompted the judge to intervene, saying this apparent manipulation of the evidence meant he had three options: to order a retrial; to allow bad character evidence against Mahmood; or to drop the case entirely.
After an adjournment until Monday morning, McCreath called the trial off. Mahmood, he told the jury, was key to the case as the "sole progenitor" of the prosecution as well as the only investigator and prosecution witness.
In a thinly veiled condemnation of the Sun's tactics, McCreath said Mahmood was "someone who appears to have gone to considerable lengths to get Ms Contostavlos to agree to involve herself in criminal conduct, certainly to far greater lengths than would have been regarded as appropriate had he been a police investigator".
The case is yet another blow for News UK and the retrospective reputation of the News of the World. The tabloid was closed in 2011 in the wake of revelations about phone hacking which saw the paper's former editor Andy Coulson jailed earlier this month.
Joan Smith of the media pressure group Hacked Off said the Contostavlos case demonstrated the need for a strong press watchdog. "What has happened in this case explodes the self-serving myth propagated by some in the press industry, that when the News of the World closed, newspaper malpractice was ended.
"The suggestion that the worst elements of the press cleaned up their act during or after the Leveson inquiry has now been shown repeatedly to be unsustainable."During long pre-trial argument, Jeremy Dein QC, for the defence, accused Mahmood of active duplicity in some stories. To support this he called a former Mahmood associate, Florim Gashi, who told the court he helped the reporter "make up stories for his newspaper".
But in his cross-examination Mahmood vehemently denied any duplicity in his work, saying that had Contostavlos showed no interest in a drug deal his team would have immediately given up.
