Polanski hopes to give video evidence from his home in France

He has a human right to a fair hearing and to protect his reputation through the courts, it was argued.

The Oscar-winner wants to testify via videolink from France, to avoid the risk of extradition to the US to face outstanding child sex offences.

The 71-year-old is suing Vanity Fair over an article published in 2002.

He fled the US in 1977 after admitting that he had unlawful sex with a 13-year-old girl before a sentence was imposed, and has not returned since.

The appeal is being heard by a panel of five Law Lords

He could be handed over to the US if he comes to Britain, because there is an extradition agreement between the two countries.

Richard Spearman QC, representing the director before a panel of five Law Lords, said Mr Polanski's inability to give evidence in Britain was being used as a reason to impede the libel case - or cause it to collapse.

"This leaves the case in a mess and a situation where a defendant can get away with libel scot-free," said Mr Spearman.

The appeal judges were effectively saying the trial could not go ahead because the director was "a fugitive from justice" in America, he added.

He said there was no basis for suggesting a trial could not begin until the claimant had come into the UK and exposed himself to the extradition process.

Mr Polanski, who was born in Paris but brought up in Poland, was described by his lawyer as a French citizen.

Fair trial

He said the director had returned to live in France after US courts hinted he would get a long jail term, despite the parents of the girl involved saying he should not be punished by prison.

"There is nothing in the extradition treaty to say that a country should impose sanctions on citizens of other countries," said Mr Spearman.

He said his client had been stopped from coming into the country because the courts did not like his fugitive status.

Mr Spearman said the starting point in any decision on how Mr Polanski should give his evidence should be based on whether he could receive a fair trial of the libel case.

"The court is imposing a sanction on him that unless he comes to this country, exposing himself to extradition, his civil claim will fail or be impeded."

The hearing was later adjourned to Thursday.

Postponement

Earlier this month, the Court of Appeal upheld a ruling that Polanski would have to appear in person to give evidence rather than via a link from his Paris home.

"The court should not be seen to assist a claimant who is a fugitive from justice to evade sentence for a crime of which he has been convicted," Lord Justice Jonathan Parker, one of the Court of Appeal's three judges, said.

The libel case was postponed until January following the court's decision.

The Law Lords will reserve their judgment and a written decision made early next year.

Media law experts have said that if Mr Polanksi's appeal fails, it could put an end to his libel battle.