News of the World wanted more; Max Mosley in "Sick Nazi Orgy" would sell even larger numbers of papers.

In deciding to go ahead, they made what might turn out to have been one of the biggest editorial blunders in British popular journalism in recent years.

The case hangs now on a combination of legal niceties and semantics. It was the paper's contention that Mosley had ordered a Nazi orgy, and many - sometimes contradictory - references have been made to this in court evidence given by the paper's reporter, Neville Thurlbeck.

The downturn in the paper's case was reached when it emerged that in a follow-up "interview" with 'Woman E', written by Thurlbeck and published the week after the first expose, he attributed to her a misleading quote.

His witness statement (not substantiated by Woman E, who didn’t show up to give evidence yesterday) claimed that Woman E had told him there may have been Nazi elements in previous sessions with Mosley, organised by Woman A, at which Woman E had not been present.

His 'interview' was based on a draft signed off by Woman E in return for £8,000. To this signed draft, but without her visible agreement, he subsequently added: "Last week's orgy was definitely not a one-off," said our source, who charges £125 an hour for her services. "He uses us girls three or four times a year. It's mainly in London, at smart flats which are rented as torture chambers."

Will Mosley be awarded the 'exemplary' – ie punitive – damages he seeks? As far as this layman can grasp, that depends on whether or not it is deemed that the paper deliberately misled their readers, or were merely guilty of a careless error.

Mark Warby, QC for the News of the World, will deliver his final submission on Monday, and James Price, QC for Mosley, on Tuesday. For students of the finer points of libel law, it will be an instructive two days - for aspiring editors of popular newspapers, too.

Peter Burden is the author of ‘News of the world? Fake Sheikhs & Royal Trappings’, Eye Books, £12.99. His regular blogs from the Mosley hearing are here