One Nation co-founder David Ettridge’s bombshell $1.5 million legal action against Opposition Leader Tony Abbott is looming as unwanted distraction as the prime minister-in-waiting presses home his electoral advantage against the Gillard government.

Ettridge, alongside former Abbott staffer David Oldfield, was the other half of the “two Davids” that set up One Nation in 1997 as a vehicle for Pauline Hanson’s dubious political ambitions.

But Abbott had his own fightback forum — Australians for Honest Politics — convened soon after to destroy Hanson and her party through legal action focused on its dubious Australian Electoral Commission registration. The $100,000 fund aimed to protect the Coalition’s vote at the 1998 federal election from a devastating right-flank assault.

Ettrdige is claiming damages relating to lost employment, legal fees, loss of freedom and the forced sale of his house, accusing Abbott of unlawfully assisting civil action for which he was ultimately found not guilty.

The question that’s always hung over Abbott — outlined by former Sydney Morning Herald webdiarist Margo Kingston almost a decade ago — is that he avoided disclosing donors to Australians for Honest Politics to the AEC and fibbed about a pledge to cover lay civil litigant (and disaffected One Nation member) Terry Sharples’ legal fees. Kingston wrote the apparent deception had ended any dreams Abbott ever had of becoming prime minister.

This helpful timeline sketched out by Kingston in her 2007 book Still Not Happy, John and republished on New Matilda in December remains the best top-down primer.

The second defendents are listed as “known contributors” to the slush fund and include former Liberal MP and trustee Peter Coleman, Packer lieutenant and Graham Richardson associate Trevor Kennedy and mining rich-lister, Lavoisier Group chairman and Institute of Public Affairs board member Harold Clough.

On morning radio today, Abbott dismissed the suit as “just a bit of payback” over the tumultuous wheeling and dealing of the late 1990s as Hanson fever took the country by storm. “It was a campaign that I was very much a part of all those years ago, and I guess some of the former One Nation types have never really forgiven me for it,” he said, admitting he had tried to expose the “dodgy” nature of the party.

In the full statement of claim obtained by Crikey Ettridge alleges:

“[My] character was under assault on a number of fronts as a result of the defendant’s actions during a heightened period of media and political prejudice against the One Nation Party … Such a breach of the law is made especially more unacceptable when the person doing it is a Member of Parliament and a legislator who acts with no respect for the very law he has sworn as a Member of Parliament to uphold. The 1st defendant acted above the law…

“Abbott’s motivation was vengeful and political and he wanted to destroy the lawfully registered Pauline Hanson’s One Nation party in order that the Liberal Party to which he belonged, would not lose votes and consequent electoral funding at the October 1998 Federal election to the new One Nation Party.”

Ettridge and Hanson were sentenced to three years jail in 2003 after a court found the duo guilty of fraud over the status of the 500 members listed on One Nation’s registration form. But the sentence was overturned on appeal later that year and they were immediately released.

In the statement of claim, Ettridge maintains his “complete innocence” over all the charges ever levelled against him.