Five UK media firms have refused to hand over leaked documents relating to a possible takeover bid.

The four national newspapers and Reuters news agency turned away representatives of Interbrew, the Belgian brewing giant.

Documents were leaked to:

Financial Times The Times The Guardian The Independent Reuters

Interbrew is now expected to go to the High Court to ask for police help in returning the documents.

Interbrew says it needs the documents for an investigation into the leaks.

Grave implications

It has been trying to retrieve them through the courts.

The House of Lords has refused to give the media groups leave to appeal against a court order to return the documents.

Declining to hand over the documents, Hugh Carnegy, deputy managing editor of the Financial Times, said: "We believe there are fundamental issues of freedom of the press at stake."

The Belgian brewer will visit the FT offices

The media groups say the case has serious implications for press freedom as the documents might reveal who leaked the information and thus deter people who might want to blow the whistle in future on corporate fraud.

The five now want to take their case to the European Court of Human Rights.

Last November, the newspapers received documents which outlined a possible bid by Interbrew for South African Breweries.

'Doctored'

Interbrew confirmed that a bid was under consideration.

However, it said the documents had been doctored to make it appear that a bid was imminent, causing its share price to fall.

Interbrew wants to trace the source of the leak and plans to hand the documents to the Financial Services Authority, which is conducting its own investigation.

Enforcing this judgement will make people think twice before blowing the whistle on fraudsters

Financial Times

But the editors say the law recognises the right of journalists to protect their sources and the law lords are effectively curbing press freedom.

The law lords said the public interest in protecting the source of the leak was outweighed by the public interest in letting Interbrew seek justice in the courts.

Why leak?

The case doesn't just raise issues of freedom of speech and journalists' right to protect their sources, but also prompts questions about the relationship between financial journalists and the companies on which they report, legal experts say.

While Interbrew wants to know the identity of the "leaker", that person's motive is of almost equal interest. People who give confidential information to the press, usually do so for a reason.

The leaker could have been trying to profit from the resultant move in shares. Interbrew's share price fell after publication while SAB's share price rose.

Other possible motives are that the leaker was trying to scupper the deal, by releasing details too early.

Or - as often happens - the leaker was "flying a kite", trying to assess reaction to a possible deal.

More difficult

Given the scale of corporate fraud and wrongdoing now being uncovered in the US, the newspaper editors have argued, it would be wrong to curb press freedoms.

Editor of the Times newspaper, Robert Thomson, said: "Sources do need protection, even if their motives are not entirely clear.

"In general, the whistleblower has always had an important role, and any action which would make it more difficult for honourable citizens to expose corporate wrongdoing, particularly at this time, can hardly be in the public interest."

Andrew Gowers, editor of the Financial Times, said: "At a time, when corporate malfeasance is in the air, whistleblowers have a key role to play in uncovering fraud."

The paper's editorial said: "Enforcing this judgement - or otherwise forcing disclosure in this matter - will make people think twice before blowing the whistle on fraudsters."