Nato yesterday dismissed as unfounded a Maltese newspaper report that a Libyan missile had been intercepted as it headed for Malta, a claim also denied in the strongest terms by the Prime Minister and the Libyan embassy.

“We do not talk about our military capability as we do not go into the operational details; however we have not seen any evidence of the use of longer-range ballistic weapons such as the Scud missiles,” a Nato spokesman told The Times.

The Nato statement followed a scathing attack by Prime Minister Lawrence Gonzi on the front page story that appeared in It-Torċa yesterday. It claimed that an unexplained, explosion-like sound heard on June 12 in Dingli and surrounding areas was in fact a Libyan Scud missile being intercepted by a Nato missile as it headed towards Malta.

“This is journalism of the worst quality, fictitious and built on heinous lies which do great harm to our country,” Dr Gonzi said.

The sound, which many had likened to what might be produced by a fireworks factory explosion, travelled across a few towns. Some people had even reported a tremor, but the cause remains a mystery and no evidence of a blast or burning was ever found.

The Libyan embassy called the report “completely baseless and false”.

“Libya never fired on that date missiles against Malta or any other country. Air space is fully controlled by Nato which could verify such planes,” the embassy said in a statement.

“The Libyan Embassy seizes this opportunity to reassure the Maltese government and the friendly people of Malta of Libya’s continued respect for the integrity of Maltese territories and appreciation of Malta’s assistance to Libyan people,” it said.

The article in It-Torċa claimed that two Nato ships had been posted along the Libyan coast to detect and intercept any missiles and implied a link between the incident and the more recent visit by the US commander in charge of the Nato mission in Libya, James Stavridis.

Dr Gonzi said: “As the Prime Minister of a country in such a delicate moment where we have millions of euro invested in Tripoli and Benghazi by Maltese, where we’re carefully trying to safeguard the interests of our workers, factories and people who work in Libya... to find this kind of filth on a paper which has ties with the Labour Party is unacceptable.”

He emphasised the link with Labour, stressing that for him It-Torċa and Labour were the same thing.

“Only God knows how much we’ve been careful since the issue broke out,” Dr Gonzi said, challenging Labour Leader Joseph Muscat on the matter.

Reacting, Kurt Farrugia, Labour’s director of communications, shrugged off the Prime Minister’s comments saying “by trying to involve Labour in this issue the Prime Minister is barking up the wrong tree”.

In a statement, the newspaper’s editor Aleks Farrugia said it stood by its story and pointed out that Dr Gonzi “did not provide one fact which belies the story we published”.

“We would like to clarify... that there is no room for alarm in the country. Today, because of the two ships on guard for the possibility of other missiles being fired, we can say that our country’s security is far better than it was on June 12,” Mr Farrugia said.