The former Conservative MP and spy writer Rupert Allason was last night fighting to keep out of jail after a high court hearing over claims that he is guilty of contempt.

The publishers Random House allege that Mr Allason - who uses the pseudonym Nigel West - has failed to comply with a court order demanding that he disclose all his assets.

Mr Allason, 50, has said that he could not pay £200,000 in indemnity costs to the publisher following a court case last year when he said he wrote a manuscript for The Enigma Spy, a book published posthumously under the name of John Cairncross, the "fifth man" in the Cambridge spy ring.

Mr Allason claimed 50% of his manuscript appeared in the book, and the remainder appeared in edited form.

After that hearing Mr Justice Laddie said: "I have come to the clearest possible conclusion that Mr Allason has told me untruth after untruth in pursuit of this claim." He rejected Allason's claims to authorship.

The author described the penalty as "financial destruction" and "disproportionate".

Metropolitan police officers subsequently visited the Caribbean in connection with the case and are still pursuing their inquiries.

Mr Justice Neuberger ruled yesterday that Mr Allason, whom he described as a "public figure", should disclose his private financial affairs in open court. He imposed a temporary gagging order on the media after Mr Allason said he would appeal. A number of the author's assets were mentioned in court but the media is at present prevented from referring to them.

The former MP for Torbay argued that the judge's initial ruling raised "hideous issues".

Stephen Bate, counsel for Random House, later told the judge he had seen a picture of Mr Allason shown lying on the deck of a cruise liner when he should have been complying with the court order to disclose his assets. Mr Allason said he had been on the ship as as a lecturer, a job which, he had told the court, he could not cancel, and that this had led to the late disclosure.

He accused Mr Bate of "putting the worst possible inference" on events after he was ordered to disclose his assets.

The hearing was adjourned until tomorrow when Mr Allason will face further cross-examination from Mr Bate before the judge rules on whether or not the writer and former MP is in contempt and, if he is, what punishment should be handed down.

The judge told Mr Allason on Tuesday that if he was found in contempt he could be sent to prison.