AN INDEPENDENT ombudsman could be appointed to settle disputes between

individuals and newspapers in minor defamation cases, it emerged last

night.

The idea was floated by the Lord Chancellor, Lord Mackay of Clashfern,

during evidence to the Commons National Heritage Select Committee, which

is conducting an inquiry into privacy and media intrusion.

The appointment of an ombudsman might be seen as one way round the

problem faced by people who feel they have been libelled by the media

but who cannot afford to go to court, with the risk of losing the action

and having to pay full costs.

Attention in such actions has centred on the huge sums paid to

celebrities, but the Lord Chancellor made clear the Government

recognised the difficulties of people much further down the scale.

He left the committee in no doubt that Government money was unlikely

to be made available for legal aid in defamation cases -- because of the

restrictions on public spending -- and that another solution had to be

found.

He said: ''It is not a very good time for extending the scope of legal

aid.

''No State can attain the ideal in every respect. There have to be

limitations on what the State can afford to assist.''

According to Lord Mackay, it might initially be sufficient to make it

obligatory for newspapers to publish the ombudsman's findings.

However, the Lord Chancellor also suggested that the ombudsman could

make a recommendation as to the amount of financial compensation that

should be paid.

The implication was that once a newspaper had printed a correction, it

would be difficult for it to refuse to make a payment.

The ombudsman scheme would be paid for by the newspapers, and Lord

Mackay told the MPs that it should be possible to find a person of

quality who would be respected by the press and who would be able to

satisfy both sides in any dispute.

The committee was impressed by Lord Mackay's comments, and the idea of

appointing an ombudsman -- or forming a panel of ombudsmen drawn from

different newspapers -- might well emerge as one of the key

recommendations in its final report.