Liverpool John Moores University has threatened to sue a Conservative MP after he criticised its relations with the Libyan regime, Index on Censorship has learned.

Robert Halfon MP, whose grandfather was expelled from Libya in 1968, has been vociferous in his opposition to the Gadaffi family, and particularly its ties with UK universities.

London School of Economics director Sir Howard Davies resigned earlier this month after it was disclosed the school had taken £1.5 million from the north African state.

LJMU does not deny that it has had dealing with the Libyan regime, saying in a statement that “everything that we have done has been delivered transparently, at the invitation or with the encouragement and the support of the FCO (through the British Ambassador) and the British Council.”

British Prime Minister David Cameron said this week that Universities should ask “some pretty searching questions” about relations with Libya.

On Monday, the coalition government published its draft libel reform bill, which proposes to protect expression of “honest opinion”.