A federal appeals court ordered a new trial Friday in a defamation lawsuit brought against Watergate conspirator G. Gordon Liddy.

Ida "Maxie" Wells, 53, sued Liddy in 1997 for $5.1 million after he publicly accused her of operating a call-girl ring while working as a secretary for the Democratic National Committee.

Liddy, the former assistant to President Richard Nixon, claimed burglars who broke into Democratic headquarters in 1972 were looking through Wells' desk for pictures of prostitutes — including a photo of the future wife of John Dean, the former Nixon White House counsel.

Liddy, now a conservative radio talk-show host, also claimed Dean organized the burglary to retrieve the photos, and not to obtain political intelligence to help re-elect Nixon.

U.S. District Chief Judge J. Frederick Motz dismissed Wells' claim in February 2001 after jurors deadlocked. The district court held that no reasonable jury could find that Liddy was negligent in making allegedly false statements.

On Friday, a three-judge panel of the 4th U.S. Circuit Court of Appeals ruled the evidence "does not preclude Wells from proving that Liddy failed to take reasonable steps in assessing the veracity of his statements."

"It's just a total fantasy," said Wells' attorney, David Dorsen. "Numerous people working in the Democratic National Committee flatly denied that there was anything resembling a call-girl operation,"

Liddy's attorney, R.M. Nazarian, said he had not seen the opinion Friday and would not comment.

Motz initially threw out the case in 1998, but the 4th U.S. Circuit Court of Appeals reinstated it a year later.

John and Maureen Dean also have repeatedly denied Liddy's theory.