GLASGOW Govan MP Mohammed Sarwar has lost a crucial round in his #750,000 defamation action against the News of the World.

The paper ran an article stating that Mr Sarwar handed over a #5000 ''bung'' in a carrier bag as an inducement to rival candidate Badar Islam to ''ease off'' in the General Election campaign.

Mr Sarwar claims that the newspaper story is untrue and that he has been falsely portrayed as a man of immoral, dishonest, and disreputable character.

In a legal debate at the Court of Session, he asked temporary judge Mr Gordon Coutts QC to throw out the newspaper's defence that its story was true, and restrict the case to an argument over the amount of damages he should receive.

However, his plea was rejected and a full hearing in the case will now take place at a later date when the News of World will try to establish that its claims against the MP are substantially true.

In a written judgment issued yesterday, Mr Coutts said the newspaper ran a front-page story 17 days after the General Election headed: ''Labour MP in Election bribe scandal''. The newspaper stated: ''A new Labour MP paid an election rival a #5000 bung and promised to 'compensate' him further if he ran a losing campaign.''

Mr Coutts said that the legal defences now lodged by the News of the World did not entirely coincide with the statements contained in the published story.

The defences detailed a number of meetings between Mr Sarwar, Mr Islam, and Mr Islam's election agent.

It was alleged that about a week before the election Mr Sarwar met Mr Islam at a restaurant at Glasgow Airport and asked him if he would ''ease off'' his campaign. Mr Sarwar is then supposed to have said: ''If anybody does me a favour I never forget. I can compensate you after the election.''

A further meeting at the Marriott Hotel was allegedly arranged after the election at which Mr Sarwar was said to have asked Mr Islam if he would sign an affidavit stating that Peter Paton, the unofficial Scottish Labour candidate, had been running a campaign to stop Mr Sarwar's election.

The newspaper claims that at another airport meeting on May 14 Mr Sarwar stated to Mr Islam: ''I will look after you'' and raised five fingers. ''I will give you #5000. I beg you to swear the affidavit.''

According to the newspaper, the next day, May 15, Mr Sarwar handed Mr Islam a carrier bag containing #5000 on a car journey between a solicitor's office in Cumbernauld and Glasgow.

Mr Coutts said that in its defences the newspaper alleged that at another Marriott Hotel meeting on May 16 Mr Islam asked what would happen ''if it comes out that you have given #5000?'' Mr Sarwar was said to have replied: ''How will anyone find out?'' The News of the World argued that in making the #5000 payment over a promise to ease off in the election campaign Mr Sarwar was acting corruptly and the payment was a bribe.

He also knew or should have known that the terms of the proposed affidavit to be sworn by Mr Islam were false, and to the extent which the #5000 was referable to the affidavit that was also a bribe.

Mr Coutts said that in asking to have the defence of truth or veritas thrown out Mr Sarwar argued that the News of the World had made no attempt to justify the claim that, before the election, a payment had been made to Mr Islam. It was not now alleged that any money had changed hands before the election.

The newspaper submitted that the ''sting'' of what had been published was that Mr Sarwar was guilty of bribery and corruption at the time of the last election. They sought to prove that Mr Islam had been asked to ''ease off,'' that he had been asked to swear an affidavit, that he had been given #5000 in cash and that he got the impression that the cash was a payment for the affidavit and easing off in the campaign.

Mr Coutts said he had decided, with some hesitation, to allow the case to go ahead with the newspaper's plea of truth or veritas standing. ''The 'sting' is that Mr Sarwar was guilty of bribery and corruption at the time of the last election and that a corrupt payment was made to Mr Islam it does not appear to me to be of material significance whether the money was paid before or after the poll.''