An adviser to a swimming pool company was caught out trying to muddy a rival's bid to build an Olympic-standard venue.

Johannes Moyer made a series of false allegations aimed at sinking Euro Pools' hopes of winning the contract for a 50m pool at a £37 million sports centre in Crawley.

Mr Moyer, who provides guidance to PPF Associates but holds no formal position, told Crawley Borough Council that Euro Pools was insolvent.

He also claimed its tender for a moveable boom and floor was a breach of PPF Associates' copyright in a phone call to Andrew McKenzie in the council's legal department in January.

Two days later, he repeated the allegations in a letter to the council on behalf of Hertfordshire-based PPF, which trades as Prestige Pool Floors.

But he found himself in hot water when Euro Pools denied the allegations and sued him and PPF for libel.

Jo Sanders, solicitor for Glasgow-based Euro Pools, told London's High Court: "These allegations were wholly false."

Euro Pools had not infringed any copyright and "was not and is not insolvent".

She said: "It is a successful and profitable company. The tender process was conducted entirely properly and lawfully."

Nicholas Saunders, for PPF Associates and Mr Moyer, admitted the accusations were untrue.

His clients apologised unreservedly and were now happy to set the record straight.

They were ordered to pay Euro Pools' legal costs of £32,000.

The libel row was the latest hitch to hit Crawley's hopes of establishing a leisure venue capable of playing a part in London's 2012 Olympics bid.

The council drew up plans to replace the old leisure centre in Haslett Avenue with a world-class arena on the Thomas Bennett College campus more than two years ago.

But Sport England rejected a £3 million Lottery application last year and a second request through the New Opportunities Fund was turned down last January.

Work started the following month after councillors agreed to stump up the final £2.9 million from reserve funds. The finished centre will include a sports hall the size of 12 badminton courts, a separate gymnastics hall, three squash courts, two dance studios and a health and fitness area.

Some £19 million of the costs will come from the sale of the present Crawley Leisure Centre site.

The announcement that the council would provide the final £2.9 million coincided with the decision by the London 2012 organisers not to use any Sussex venues in their bid.

But the council hopes the new pool could still be used for training by visiting athletes if London was to host the Games.