LONDON, OCT. 24 -- One of the world's biggest press barons locked legal horns with a prominent investigative reporter today as Robert Maxwell sued Seymour M. Hersh over Hersh's allegations linking Maxwell and one of his top employees with Israel's Mossad spy agency.

Hersh told a press conference here that he stood by the charges in his new book, "The Samson Option," that Nicholas Davies, foreign editor of the Maxwell-owned Daily Mirror, acted as a Mossad agent by brokering arms sales to Iran and betraying the whereabouts of Mordechai Vanunu. Vanunu, an Israeli dissident who in 1986 publicly disclosed details of his country's top-secret nuclear weapons program, was later abducted by the Mossad and returned to Israel, where he is serving a 16-year prison sentence for treason.

Minutes after Hersh reiterated the allegations, a lawyer for Maxwell handed the author two writs from Maxwell's Mirror Group Newspapers and from Davies denying the charges and suing Hersh and his British publisher, Faber and Faber, for libel. Davies has branded the charges "a total lie."

The Hersh book, an expose of Israel's nuclear weapons program, accuses Davies of forming a partnership with Ari Ben-Menashe, a former Israeli intelligence operative, to sell arms to Iran in 1983. The book cites as principal sources Ben-Menashe and Davies's former wife, actress Janet Fielding, and says Ben-Menashe has "hundreds of telexes and other documents" showing that the partnership, Ora Limited, was actively involved in arms trafficking from Davies's London home.

According to the book, Davies also worked with Maxwell to produce a story in the Sunday Mirror debunking Vanunu's claims before they appeared in a rival newspaper, the Sunday Times. At one point, Maxwell, who often boasts of his ties to Israel, reportedly told Ben-Menashe: "I know what has to happen. I have already spoken to your bosses."

Hersh claims Davies then found out the name of the hotel where the Sunday Times was keeping Vanunu and tipped off the Mossad, which arranged for a female American-born agent to entice Vanunu to fly to Rome, where he was abducted and returned to Israel to stand trial.

Maxwell and Davies have both heatedly denied the charges, which were repeated in the House of Commons Tuesday by two lawmakers. The Mirror then lambasted the two members of Parliament, Rupert Allason and George Galloway, as "dishonorable men." A front-page commentary added: "In truth, they have as much honor as a pair of jackals scavenging in a rubbish heap, which is where they both belong."

Today, the Mirror claimed to have exposed the "smear" against Davies by alleging that one of the letters purportedly written to him by an Ohio arms dealer in 1985 was a forgery. The letter from William Johnson, managing director of the now-defunct Armtec International of Columbus, concerned the sale of 30 howitzer artillery cannons and ammunition.

But Johnson reportedly told the Mirror last night that he had not signed the letter. He also said the man he met in Ohio in 1985 who claimed to be Davies bore no resemblance to a photograph of the newspaper editor. To add to the confusion, another newspaper, the Guardian, reported today that Johnson had twice confirmed to its reporter that he had indeed signed the letter.

Davies has alleged he may have been framed by Ben-Menashe, a former friend and news source. Davies says Ben-Menashe bore him a grudge after the editor did not come to his defense when the Israeli was charged in New York with illegally selling C-130 Hercules aircraft to Iran without U.S. permission. He was acquitted in federal court in New York last November.

Hersh, who won a Pulitzer Prize for disclosing the My Lai massacre in Vietnam in 1969 and who is a former New York Times reporter, insisted that what he had written about Davies and Maxwell was accurate and defensible in court under Britain's restrictive libel laws.

"I have been a reporter for 25 years," he told reporters, according to the British Press Association. "Somebody pops out and says someone is an Israeli intelligence agent. Every alarm you have starts ringing. I was completely, absolutely and appropriately skeptical and disbelieving as anybody would be."

But Hersh said he had been convinced by documents and other information and he dismissed the idea that someone might have framed Davies. "I did not approach this as an ingenue," he said. "I approached this as someone who has an awful lot to lose if I did not check my story properly. I have checked this chapter and this book as thoroughly as anything I've written. This is simply correct and that's all there is to it."