The leaked US cable says Grace Mugabe had gained millions of dollars from trading in "blood diamonds" [EPA]

The wife of Robert Mugabe, the Zimbabwean president, has filed a suit against a newspaper demanding $15m for publishing leaked US cables on her alleged involvement in illicit diamond trading.

Last week The Standard newspaper, quoting a 2008 cable sent by the US ambassador to Harare, reported that Grace Mugabe had profited from illegal diamonds mining.

The cable to Washington that was leaked by whistleblower website WikiLeaks said Zimbabwe's first lady gained millions of dollars from diamond mining in the Marange district of eastern Zimbabwe.

State-owned Herald newspaper on Wednesday said Grace Mugabe filed the defamation suit against The Standard demanding damages over the article.

The allegations cover a period before the formation of a unity government between Mugabe, and Morgan Tsvangirai, the prime minister, in February 2009.

In the high court papers filed on Thursday, Grace Mugabe said the story was false and malicious and that readers of the paper would believe it.

"This is an imputation of criminality and association with violations of human rights. Whatever it [The Standard] prints is regarded as gospel truth by those people in Zimbabwe and abroad.

In the summons Grace Mugabe said the allegation has tarnished her credibility as "a person of such high standing" in the minds of all "right thinking" people.

George Chikumbirike, Mugabe's lawyer, said the article wrongly portrayed Grace Mugabe as corrupt in that "she used her position as the First Lady to access diamonds clandestinely, enriching herself in circumstances in which the country was facing serious foreign currency shortages".

'Blood diamonds'

The stones dubbed "blood diamonds" because of the human rights abuses associated with their extraction, were resold to foreign buyers, earning each of the members of the powerful group hundreds of thousands of dollars a month, said the classified US documents.

In the cable James McGee, the US ambassador, says "high-ranking Zimbabwean government officials and well-connected elites are generating millions of dollars in personal income by hiring teams of diggers to hand-extract diamonds".

The cable then discussed a meeting with Andrew Cranswick, the chief executive of the British mining firm African Consolidated Resources, that had a claim to the Chiadzwa mine revoked by the Zimbabwean government, according to McGee.

"According to Cranswick, there is a small group of high-ranking Zimbabwean officials who have been extracting tremendous diamond profits from Chiadzwa," the cable said, naming Grace Mugabe and Gideon Gono, the country's central bank governor.

Other Zimbabwean government officials implicated in the scandal, according to the cable, include Joyce Mujuru, the vice-president, and the head of the army, General Constantine Chiwenga.

Rights groups have accused Zimbabwe's military of widespread atrocities in the diamond fields in 2008 as Mugabe's government moved to stop thousands of illegal miners on the poorly secured fields in the east of the country.

Zimbabwe is now struggling to sell the Chiadzwa diamonds after global gem regulator Kimberley Process barred members from dealing in the stones, saying their certification by global regulators did not guarantee they were free from rights abuses.