A Pakistani news agency at the centre of controversy over a report based on fake US diplomatic cables containing crude anti-India propaganda has sacked an editor for "fabricating a false story."

Siddique Sajid, an editor at 'Online' news agency, was fired following an inquiry ordered by the organisation's owner and Editor-in-Chief, Mohsin Baig.

"The decision to sack Mr Siddique Sajid was made after it was established in the inquiry that he had 'solely misused' his editorial authority in the absence of the news agency's Editor-in-Chief by 'fabricating a false story' on a highly sensitive subject such as the WikiLeaks' disclosure," said a message posted on Online's website.

The report, based on fake diplomatic cables from the US embassy in New Delhi purportedly released by WikiLeaks, was carried prominently by several English and Urdu dailies.

'The Express Tribune', a partner of the International Herald Tribune; and 'The News' published apologies after it was proved that the purported cables quoted in the report were fake.

Both newspapers had blamed Online for circulating the fake report.

However, the report first appeared in the 'Daily Mail', a little-known newspaper which, according to reports in the Pakistani and international media, is believed to have links with intelligence agencies.

The Daily Mail has been unrepentant despite caught out and yesterday posted a message on its website claiming that its "disclosures" were authentic.

The message posted on Online's website said the news agency's management "regrets the release of the said story by Online, its subsequent publication by media, and the consequent erosion of their public credibility."

Online further said "stringent measures are being adopted to prevent vested interests from planting such fabricated stories."

Justifying the sacking of the editor, the news agency's owner Baig said: "I know the difficulty of reporting in a place laced with vested interests operating clandestinely, but reporting on currently the most volatile subject in global media and, that also, without corroborating the story's contents with factual documents is unacceptable."