LSE reputation wavers as links to Gaddafi regime emerge

The director of the London School of Economics has resigned as his university's reputation continues to take a battering over its links to Libyan autocrat Colonel Muammar Gaddafi's regime.

Sir Howard Davies announced that he would step down on 4 March, in the wake of fresh revelations that LSE was involved in a £2.2 million deal with Libya to train young Libyans to join the North African country's ruling elite.

Announcing his resignation, Sir Howard said: "I have concluded that it would be right for me to step down even though I know that this will cause difficulty for the institution I have come to love. The short point is that I am responsible for the school's reputation, and that has suffered."

The new allegations are just the latest in a series of revelations about LSE's links to Tripoli. It recently emerged that LSE received a £1.5 million donation from the Gaddafi International Charity and Development Foundation (GICDF), run by Col Gaddafi's son, Saif al-Islam Gaddafi - who holds a PhD from the central London university. The donation was used to finance a North African research programme at the university. This programme was suspended last week when the source of its endowment became public.

Professor David Held, who was an academic advisor to Saif al-Islam Gaddafi while Mr Gaddafi was a student at LSE, was initially appointed to the board of GICDF on 28 June 2009 - almost a month before LSE announced that it was accepting the £1.5 million donation. By October, Professor Held had been forced to step down from his position at the foundation. In December 2009, he visisted Libya on behalf of LSE's North Africa programme.

Appearing on BBC Radio 4's Today programme, Sir Howard said: "We thought that since [Saif al-Islam] was not going to control the research that this was a reasonable thing to do and this was supported widely in the school.

"It was debated at some length. We took a risk on that and I think it's right to say that that risk backfired on us."

On 8 March, the LSE agreed to put £300,000 - the equivalent of money received from the Gaddafi Foundation to initially set up the research programme - into a scholarship for North African students.

The University is now under pressure from its students to return the money it received from the Gaddafi foundation.

An independent inquiry is currently examining LSE’s relationship with Libya and Saif al-Islam. The inquiry will examine several connections with the Gaddafi regime, including:

- The £2.2 million contract to train Libyan civil servants and professionals, of which £1.5 million has already been received.
- A payment of £20,000 for tuition of the head of the Libyan investment authority.
- A payment from Libya to the university of $50,000 after Davies gave advice to country’s sovereign wealth fund in 2007.
- An award from Saif Gaddafi’s charity of £22,857, which covered travel costs for academic speakers to travel to Libya.

Independent concerns have also arisen over whether Gaddafi plagiarized parts of his PhD. These concerns are currently being addressed by the University.