WASHINGTON (Reuters) - The Supreme Court ruled on Monday that a government investigator who initiates a criminal case against a private individual and later lies to a grand jury still has immunity from a civil lawsuit over his testimony.

The high court justices unanimously handed a defeat to a Georgia accountant who wanted to proceed with his lawsuit seeking damages from a government official who was the chief investigator for a local prosecutor.

The accountant, Charles Rehberg, had engaged in an anonymous "whistleblowing" campaign about unethical billing practices at a hospital in Albany, Georgia.

Investigator James Paulk of the Dougherty County District Attorney's office falsely testified to a grand jury that the accountant had harassed doctors.

Paulk, who started the investigation as a favor to hospital officials, later admitted he had no evidence and had not talked to any witnesses. The charges against Rehberg were dismissed.

Rehberg then sued, but Paulk argued he was protected by immunity, and a U.S. appeals court based in Atlanta agreed with Paulk.

The Supreme Court's opinion by Justice Samuel Alito held that witnesses in a grand jury proceeding were entitled to the same absolute immunity from a civil lawsuit as a witness who testifies at trial.

Without immunity, the truth-seeking process would be impaired as witnesses might be reluctant to testify, Alito wrote in the 18-page opinion, adding that a witness' fear of litigation might deprive a grand jury of critical evidence.

Alito said potential liability was not needed as a deterrent to prevent false testimony. Other sanctions, mainly criminal prosecution for perjury, provided a sufficient deterrent, he said. The justices agreed to decide the case after conflicting appeals court rulings on the issue.

The Supreme Court case is Charles Rehberg v. James Paulk, No. 10-788.

(Reporting By James Vicini; Editing by Bill Trott and Todd Eastham)