She quit as Home Secretary almost three months ago but Jacqui Smith hasn’t been forgotten — not, at least, by the American “shock jock” whom she banned from Britain.

Michael Savage, one of 16 people on a list of “undesirables” drawn up this year by Ms Smith, has given her until tomorrow to agree to pay more than £100,000 in damages and costs or be sued for libel. She must also retract allegations that he incites violence, and apologise, he says.

Mr Savage, 67, whose controversial Talk Radio Network show has eight million listeners, has been accused of racism and homophobia. He is the third-most popular radio talk-show host in America. The Home Office said that he was “considered to be engaging in unacceptable behaviour by seeking to provoke others to serious criminal acts and fostering hatred which might lead to inter-community violence”.

His name is on a list including the convicted murderers Artur Ryno and Pavel Skachevsky, leaders of a Russian skinhead gang; Yunis Al-Astal, the Hamas MP;Mike Guzovsky, the Jewish extremist; the former Ku Klux Klan grand wizard Stephen Donald Black; and Erich Gliebe, a neo-Nazi. An assortment of “preachers of hate” and terrorists are also on the list.

In an interview with The Times Mr Savage said that he had tried the diplomatic approach with the Home Office but now wanted action. His British lawyers had sent Ms Smith a letter saying that if she did not comply they would issue a personal writ against her immediately.

He accused Ms Smith and the Home Office of putting his name on the exclusion list to provide “political balance”.

He cited Home Office e-mails that his lawyers have obtained under the Freedom of Information Act showing that one official accepted that he had never incited violence. Another document said his name would show that those excluded “are not all Islamist extremists”.

“The bureaucrats think they can do this kind of thing and get away with it,” he said.

While admitting that his views could be offensive to some, Mr Savage said that he did not incite violence against Muslims or homosexuals. A media lawyer, Mark Stephens, of the law firm Finers Stephens Innocent, has said that Mr Savage seems to have a strong case.

The letter, from the legal firm Olswang in London, sent two weeks ago to Ms Smith at the House of Commons, says that her actions “constitute serious and defamatory allegations which are actionable under English law”.

Mr Savage, whose real name is Michael Weiner, said that the Government had told his lawyers he would have to renounce publicly his earlier statements about killing Muslims. “Any such repudiation must be genuine and comprehensive and persuade my client that this is a true shift in position,” said the letter, signed by the Treasury Solicitors. The “shock jock”, based in San Francisco, said his remarks had been taken out of context and he had nothing to take back.

He accused the Home Office of hypocrisy in its apparent decision to include him not just because of his views but also because he was a white American. One Home Office e-mail, sent by an unidentified official on November 27 last year, said that “with Weiner, I can understand that disclosure of the decision would help provide a balance of types of exclusion cases”.

Mr Savage said: “Why do they continue to dig their heels in when their own e-mails condemn their position? I am a member of the American media, a commentator. I provoke people to thought, not to kill.”

To Ms Smith, he said: “Shame on you for violating the laws of your own land. Shame on you for taking the land of the Magna Carta and turning it into a sort of mini North Korea.”

The Home Office has said it will fight a libel action and that there is little prospect of Mr Savage’s name being taken off the exclusion list.

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