Jackie Mahood, pictured here in 2001, can challenge the refusal
A former loyalist prisoner whose taxi firm was destroyed by paramilitaries has won High Court permission to challenge a refusal of compensation.
Jackie Mahood was granted leave to seek a review of NI Secretary Shaun Woodward's decision not to make a discretionary payment.
He had been turned down due to terrorist convictions, which saw him jailed for 15 years in the mid 1970s.
But Mr Justice Weatherup ruled Mr Mahood had an arguable case.
He said this was based on claims that a top level Northern Ireland Office official allegedly made him a cash offer.
"The secretary of state's overall conclusion is that (compensation) is not in the public interest. Yet it is said that an offer of £40,000 was made," the judge said.
"I do not know in what circumstances or whether indeed it was made at all. But the applicant says it was made and it requires investigation."
Lawyers for Mr Mahood, 55, told how he ran the most successful depot in north Belfast before his drivers received death threats and 24 cars were attacked.
The father of three was targeted by paramilitary gangs attempting to "muscle in" on his firm, it was claimed.
Mr Mahood was refused a discretionary payment under the criminal damage compensation scheme because of convictions for possession of a firearm and wounding with intent following a gun attack on a pub.
It was stressed, however, that since his release he has been heavily involved in peace work, including a role on the Loyalist Commission, which negotiated a truce between rival paramilitary factions.
In recent years, however, his Call-A-Cab firm has come under repeated attack, the court heard.
His drivers were warned they would be shot dead as part of a campaign to wreck the business while he himself was shot twice and targeted by pipe bombers.
A key argument centred on an allegation that a high ranking official within the NIO's political affairs department offered to pay £40,000 if it was acceptable.
Instead, Mr Mahood estimated that the damage to cars, taxi equipment and 75 contracts with drivers was in the region £200,000, according to his lawyers.
The court was also told that the original request was for £400,000.
The case will now proceed to a full hearing in September.
Tony McGleenan, appearing for the Secretary of State, confirmed instructions will be taken from the civil servant at centre of the allegation.
The barrister added: "I understand the official who has been named has retired from service."