NMT Medical has been ordered to pay £200,000 by 18 January as security in its libel case against Wilmshurst

A US medical device company that is suing a British doctor for libel in the UK courts has been ordered to lodge costs with the High Court or have its case dismissed.

The Boston-based company, NMT Medical, must pay £200,000 to the court by 18 January as security for costs in its case against Dr Peter Wilmshurst, a cardiologist at the Royal Shrewsbury Hospital.

NMT sued Dr Wilmshurst for libel after he criticised its research at a US cardiology conference in 2007. The doctor vowed to take the case to trial in order to defend scientists' rights to free academic debate.

The company threatened Dr Wilmshurst with libel a second time for subsequent comments he made about the case on BBC Radio Four's Today programme.

"During the last three years, enormous pressure has been placed on my family and me from time wasted dealing with the case, money laid out for legal costs and interference with my ability to work and other activities," Dr Wilmshurst said.

"I'm concerned my case will have a chilling effect because other scientists and doctors will realise the enormous financial and time costs of speaking out about products and the risk of being sued by manufacturers."

NMT manufactures a device called Starflex, which is designed to close a specific type of hole in the heart called a patent foramen ovale (PFO). Dr Wilmshurst's comments related to a study of the device's ability to reduce migraines in patients diagnosed with PFO.

Speaking at the High Court yesterday, Master Foster ruled that if NMT Medical did not lodge funds by 18 January, the case would be struck out and the court would decide how much of Dr Wilmshurst's costs the company must pay. In court, NMT's solicitor had argued that the order would stifle the libel case as the company's finances were "dire".

The legal action has become a test case in Britain, where libel law has been used to suppress open scientific discussion leading to growing pressure on the government to reform the legislation. The tendency for overseas litigants to sue in the UK courts has been dubbed "libel tourism".

Speaking after the hearing, Dr Wilmshurst's solicitor, Mark Lewis, said: "From the libel tourism point of view, NMT have had a pretty bad vacation."

If NMT fails to pay up, the case will be dismissed, but Wilmshurst's expenses will only be covered if the company stays in business. Even if NMT does pay, the case could take months to reach a conclusion. "If the case goes ahead, I would guess the Olympics will have ended before the trial is over," Lewis told the Guardian.

He added: "What does Peter Wilmshurst have to celebrate this Christmas? Nothing proved, nothing established, no protection for scientists. The fact is that he should never have been sued in the first place. It is in that context that it is mildly pleasing that we can see the end of the tunnel. Either money is put up so that Peter can fight the case or money is not paid and Peter wins by default. What a waste of time and money."

John Kampfner, the CEO of Index on Censorship, part of the Libel Reform Campaign, said: "It is not acceptable that because of the inadequacies of English libel law, a scientist faces losing his home because there is no straightforward public interest defence he can rely on. Dr Peter Wilmshurst made his comments at an academic conference, and yet he finds himself sued by a US corporation."