Under the city-state's constitution a bankrupt may not hold a seat in parliament. When the body convenes tomorrow, the 75-year-old non-constituency MP is expected to be barred from proceedings.

After the unanimous ruling from the three-member Court of Appeal, Mr Jeyaretnam said he suspected his creditors wanted to force him out of active politics.

"I have said, what is the motive for rejecting that cash? I have said that all they wanted was to make a bankrupt," the former head of the Workers' Party said.

Yesterday's hearing was the latest chapter in a legal saga that dates back to 1995, when the party newspaper, the Hammer, published an article attacking the organisers of a campaign to promote the use of the Tamil language. Mr Jeyaretnam was the paper's editor.

The article argued that the event "was an ineffective means of advancing the language and that a number of those involved were political opportunists beholden to the government", according to a summary released by Amnesty International.

The human rights group noted that one of the 10 members of the event's organising committee who successfully sued Mr Jeyaretnam for libel was now a Member of Parliament for the ruling People's Action Party (PAP).

Mr Jeyaretnam was declared bankrupt in January after missing by one day an agreed payment to Indra Krishnan and seven other creditors from the committee who still had outstanding claims against him.

The ruling was endorsed on February 7 by Justice Tan Lee Meng and confirmed yesterday by the Court of Appeal. The decision blocks further legal avenues for Mr Jeyeretnam, who is also caught up in a range of similar lawsuits, including one backed by Senior Minister Lee Kuan Yew.

Mr Jeyaretnam is now bound to pay the S$175,513 owing to the Tamil Week creditors, plus unspecified costs associated with yesterday's hearing. He also owes others hundreds of thousands of dollars in other claims, the bulk of which stem from lawsuits brought by PAP members.

PAP leaders, including Mr Lee, have long argued that suing opponents for defamation is the only effective way of upholding the dignity of the country's political process and safeguarding their reputations.

Over the years, Mr Jeyaretnam has faced many similar cases and said earlier this year that he had lost count of the number of court appearances he had made and the sums he owed.

The propensity for legal action by PAP members and ministers has alarmed foreign human rights groups, who have said that they are concerned that it has "a chilling effect on the freedom of expression" in the city-state.

Amnesty International, which with Lawyers' Rights Watch Canada sent an observer to yesterday's hearing, said: "To many Singaporeans, the libel suits against J. B. Jeyaretnam and other government critics may act as a powerful deterrent to exercising their right to peaceful freedom of expression."

In the wake of yesterday's ruling, Mr Jeyaretnam will not be able to contest the forthcoming general election unless he has the bankruptcy order set aside. Prime Minister Goh Chok Tong must call an election by next August.

The PAP has dominated the country's political scene since elections to form a self-governing state in 1959.