The relationship that the British security services forged with Muammar Gaddafi’s regime a decade ago amounted to “a criminal conspiracy with a foreign dictator”, according to evidence before the high court, where a dozen Libyan dissidents who were subsequently targeted by the British authorities are bringing a claim for damages.

It was a conspiracy that resulted in the UK becoming “enmeshed in illegality” in Libya, where it became involved in rendition, unlawful detention and torture, Thomas de la Mare QC, representing the dissidents, told the court. Within the UK, MI5 “seemingly routinely used blackmail” to pressure Libyans into becoming unwilling informants for the intelligence agencies of both countries, by threatening their relatives in Libya with imprisonment and mistreatment if they failed to co-operate.

Furthermore, De la Mare said, information that was extracted from prisoners in Tripoli was fed into the British court system, but always during secret evidence sessions – or closed material procedures – where it could not be fully challenged. Six Libyan men, the widow of a seventh and five British citizens of Libyan and Somali origin are bringing a number of claims based on allegations of false imprisonment, blackmail, misfeasance in public office and conspiracy to assault. The claims are being brought against MI5 and MI6, as well as the Home Office and Foreign Office.

The case is one of a number arising out of the rapprochement between the UK and Libya, a process that began in late 2003. The evidence on which the latest claims are being made includes a number of previously secret documents recovered during the Libyan revolution of 2011, including a cache found at the offices of Gaddafi’s former intelligence chief, Musa Kusa.

The claimants were variously subjected to control orders in the UK or detained pending deportation, following the thawing of UK-Libyan relations. Two had their assets frozen. The lead claimant, Ismail Kamoka, had lived in the UK for eight years before his arrest in November 2002, and spent the next 16 months in custody while fighting deportation.

The recovered documents showed the British government’s case against some of the men was based upon information supplied by two Libyan opposition leaders, Sami al-Saadi and Abdul Hakim Belhaj, who were detained and rendered to Tripoli in 2004, along with their families. The documents also showed MI6 to have been involved in the two renditions. An MI5 officer subsequently told the Special Immigration Appeals Commission, which hears immigration cases related to national security, that he did not know how Belhaj came to be in Tripoli or how he was being treated.

“We now know that the UK provided the intelligence to facilitate the US rendition [of Belhaj] and we have inferred that the rendition occurred through the UK facility of Diego Garcia,” said De la Mare. Furthermore, MI5 officers who had previously questioned Belhaj in prison in Libya had been informed by him – “in no uncertain terms” – that he was being tortured by his Libyan captors. This brought into question the credibility of both MI5 witnesses and the source reports on which they relied, said de la Mare. “Whether they put up a witness who didn’t know the answer, or he was actively lying, we don’t know.”

Because part of every SIAC hearing is held in secret, in the absence of appellants and their lawyers, the high court claimants cannot be sure what evidence the government introduced or held back. However, in written submissions, lawyers for the claimants said that judges at Siac “no doubt assumed (in the absence of any disclosure to the contrary) that it was not the practice of the security services to engage in criminal conspiracies with foreign dictators to facilitate the rendition, detention and torture of targeted individuals”.

Seventeen months after Belhaj and Saadi were rendered with UK assistance, the British government signed a memorandum of understanding with the Gaddafi regime that was intended to facilitate deportations to Libya. It included Libyan assurances that it would not mistreat anyone deported from the UK to Libya, and these were accepted by the UK despite its intelligence officers having knowledge of the mistreatment of the two rendition victims, De la Mare said.

The court heard that one of the recovered documents is a Libyan intelligence officer’s record of a meeting in London with MI5, who warned him that they should jointly take steps to “avoid being trapped in any sort of legal problem [and] to avoid also that those joint plans be discovered by lawyers or human rights organisations and the media”. Another was a letter that Tony Blair wrote to Gaddafi in April 2007, to thank him for the “excellent cooperation” between the two countries’ intelligence agencies.

The government’s lawyers have not accepted the authenticity of the documents. They are asking the court to strike out the claim on the basis of a legal precedent that they say bars individuals from seeking damages in the civil courts in a way that challenges the findings of other courts. This “Hunter abuse doctrine” is based upon a judgment of the House of Lords, which in 1982 rejected a claim for damages claim brought by Gerard Hunter and the other five men known as the Birmingham Six.

They had been convicted of bombing two pubs in Birmingham, killing 21 people and injuring 182. Nine years after the damages claim was rejected, all six convictions were overturned in the court of appeal. Those convictions are now widely considered to have been one of the gravest miscarriages of justice in Britain in the 20th century.

The application to strike out the claim continues, in secret, using closed material procedure. Judgment will be handed down next year.