Lord Meghnad Desai, NRI Professor Emeritus at the LSE who has been dragged into a controversy linked to the PhD thesis of Libyan leader Muammar Gaddafi's son, has said the institute should return 1.8 million pounds it received from Tripoli, calling it "blood money".
Desai, who examined the PhD thesis of Saif Gadaffi, believes a donation given by Saif Gadaffi's International Charity and development Foundation is "poisonous" in the wake of the Libyan regime's brutal crackdown on opponents.
The PhD was awarded to Saif Gadaffi by London School of Economics (LSE) in 2008.
The following year the LSE agreed to accept the donation from his foundation.
According to a report in the Sunday Times, Desai said: "I don't believe there was any quid pro quo - you get a PhD, you give us one and a half million pounds - because giving the PhD is not in LSE's hands. It's a University of
London PhD."
The charity pledged 1.5 million pounds to the LSE, of which 300,000 pounds have been received.
The institution was also paid 1.5 million pounds as part of a 2.2 million pounds contract to train Libya's future elite.
LSE has so far refused to give any of the money back, choosing instead to set up a scholarship for students from North Africa.
"It obviously looks like we were wrong," said Desai.
"In hindsight, it has become blood money. LSE has to clean up its image and money should be going back. Any association with Libya that looks like financial gain has to be returned."
Desai, who set up the LSE's global governance centre, was one of two academics who examined Saif Gadaffi's thesis, 'The Role of Civil Society in the Democratisation of Global
Governance Institutions'.
It included input from former British Prime Minister Tony Blair, who discussed with Gadaffi how transparency in oil deals could combat corruption.
The thesis is now at the centre of plagiarism claims.