THE letter may have been a fake, but it was a good one.

Lawyers acting for defence contractors Ticon Insulation freely admit the core evidence at the heart of today's contempt of court action was a fabrication.

But, according to court documents, they also make clear that it was of high quality and matched the style of papers produced by the company concerned nearly a decade ago.

"Considerable care was taken to have the letter appear authentic," said Ticon lawyers. "It was sent on the headed notepaper which would have been in use in 2004."

It was provided as evidence in a commercial action between Ticon and its former business partners Deck-Rite, which was suing the insulation firm for about £750,000 over work carried out on the Royal Navy's six new Type-45 destroyers over eight years.

The dispute revolves around how Ticon and Deck-Rite divide up what are called "variation of price" payments from BAE Systems, the company building the vessels.

These are the payments over and above the base price for the work designed to compensate contractors for rising costs over the period of a contract that, like that for the Type-45s, runs for many years.

As part of its case, Deck-Rite asked for original documents relating to the nature of the deal.

Ticon claimed to have asked for tenders from several businesses. Deck-Rite disputed this.

Ticon then produced evidence of such a tender: a letter of response from a company called C&D Industrial Services Ltd.

It is this letter that it has now admitted to be a fabrication.

Moreover, it was a fake, acknowledges Ticon, created at the request of its managing director, Tom Stark.

Court papers from Ticon's lawyers admit Mr Stark asked an executive of C&D to produce a letter dated April 2004 and that a C&D employee did so, after checking with Mr Stark what Ticon's address would have been at the time the letter would have been sent.

However, lawyers said Mr Stark had asked for the fake letter simply to recreate documents that he knew had existed, but of which he no longer had copies.

Ticon lawyers said: "Mr Stark's conduct did not involve wilful defiance of, or disrespect towards, the court, nor was it conduct which wilfully challenged or affronted the authority of the court or the supremacy of the law.

"Rather, Mr Stark's conduct constituted a misconceived attempt to have recreated, by its original author, a document which he understood he was required to produce.

"Mr Stark accepts that what he did was the result of a gross misconception on his part.

"He accepts, and deeply regrets, that his conduct has involved the introduction into the case of a document which is not a true copy of the original."

Mr Stark, the lawyers say, did not think the document was crucial to the substantive case.

Lord Woolman, at the Court of Session, must now decide whether to hear a full civil proof on whether Mr Stark and Ticon were in contempt of court. This may be a civil matter, but any punishments would be penal.

What would a conviction for contempt of court mean for the original case itself?

That is also up to Lord Woolman.

Lord Reed, a Scottish judge on the UK Supreme Court, late last year suggested a litigant caught cheating may expect to lose their case.

He wrote: "I would suggest that judges should not be unduly reluctant to dismiss cases where it appears that the litigant is determined to subvert the adjudicative process by fraudulent means."