LONDON -- Britain's juiciest spy scandal in years continues to agitate publishing, newspaper and political circles.
The scandal is fueled by allegations that the foreign editor of the Daily Mirror, Nicholas Davies, was an intelligence agent and an arms dealer for Israel, that he betrayed a man trying to flee from Israeli intelligence agents and that his publisher, press baron Robert Maxwell, committed the paper to a campaign of disinformation in an attempt to discredit a 1986 article in the Sunday Times about Israel's development of atomic weapons.
The charges are contained in American journalist Seymour M. Hersh's new book on Israel's nuclear capacity, "The Samson Option," and in the memoirs, so far unpublished, of former Israeli intelligence operative Ari Ben-Menashe.
Some of the content of the memoirs is reported in the muckraking magazine Private Eye, and Mr. Ben-Menashe is also a source named in the Hersh book.
The allegations have raised demands by two members of Parliament for an investigation of the Daily Mirror, which specializes in sex and hideous crime, and of Mr. Davies' and Mr. Maxwell's connections with the Israelis.
Mr. Davies has denied it all. "The allegations are a complete and total lie. I reject them in every respect," he said.
Mr. Maxwell has termed the suggestions that he operated on behalf of Israel "ridiculous" and has responded by seeking a court injunction against the Hersh book in Britain and by bringing a libel action against one of the members of Parliament.
Mr. Maxwell is a rich and powerful figure in the world of international journalism.
ZTC In addition to the Mirror and the Sunday Mirror, he owns the New York Daily News and the European and has an interest in Ma'ariv, one of Israel's most influential newspapers.
Yesterday, Mr. Hersh defended the accuracy of his book.
"What I have written is true, and I stand by it," he said at a news conference.
Mr. Davies is accused of locating and betraying Mordechai Vanunu to Israeli intelligence agents in 1986. Mr. Vanunu was a technician at the Israeli nuclear center of Dimona who came to England (via Australia) and turned over to the Sunday Times apparent proof that the Israelis possessed nuclear weapons.
After Israeli agents found him, they lured him to Italy and kidnapped him. He now is in an Israeli prison.
The Hersh book says Mr. Davies operated an arms sales business, in partnership with Mr. Ben-Menashe, doing much of his business over the phone at his desk at the Mirror.
The more damaging accusation in the imbroglio, perhaps, is the one made against Mr. Maxwell's use of his newspaper for purposes of disinformation in trying to discredit the Vanunu story in the Sunday Times. This is advanced in the current issue of Private Eye.
According to the Ben-Menashe memoirs, Mr. Davies received more than $1.5 million from Israel during his years as an agent. One of their operations, according to the Israeli, was to sell 4,000 anti-tank missiles to Iran in 1987. Arms sales to Iran at the time were illegal in Britain.
Mr. Davies says he knew Mr. Ben-Menashe as a journalistic source in the Middle East. He said he gave the Israeli permission to receive mail at his house in a London suburb.
Mr. Davies' ex-wife, actress Janet Fielding, told the press that she "corroborated" some of the information reported by Mr. Hersh on Mr. Davies' alleged arms dealings.