Permitting a Thai football official to sue Lord Triesman, the former Football Association chairman, for libel would have a "substantial chilling effect" on free speech in parliament, the appeal court has been warned.

In a 10-page submission, lawyers for John Bercow, Speaker of the House of Commons, told judges that reinstating a claim by Dato Worwawi Makudi, the head of Thailand's football federation, would affect the ability of witnesses to give evidence to select committees.

The extent of the Speaker's concerns emerged last week in documents at a hearing brought by lawyers for Makudi. The Thai official is trying to sue Triesman for defamation following the peer's appearance before the culture, media and sport select committee in May 2011.

Triesman alleged that Makudi demanded the television rights to a proposed Thailand-England friendly in exchange for supporting England's bid to host the 2018 World Cup. Makudi told reporters the accusations were "not true and groundless", saying he had to speak out "because my reputation has been tarnished and it defames my family".

Triesman's comments led to the Dingemans inquiry being set up by the FA, to which Triesman gave evidence later the same month. In those hearings Triesman, a Labour peer, referred back to his evidence given to the select committee but did not repeat or expand on the allegations.

The former FA chairman maintains he is protected by parliamentary privilege, the long-established legal immunity against being sued for libel, contempt of court or other offences that enables MPs and peers to speak openly during debates and in committees at Westminster. It also extends to witnesses giving evidence before committees.

Makudi's claim was originally struck out in January this year by Mr Justice Tugendhat on the grounds that Triesman at all times had the protection of parliamentary privilege and was not acting out of malice.

Lawyers for Makudi argued that Triesman effectively repeated the comments without the protection of parliamentary privilege by saying later that he stood by what he had previously told MPs and referring back to his evidence to the committee. "The doctrine of effective repetition plainly applies in the case of defamation," Andrew Goddard QC for Makudi said.

For Triesman, Andrew Caldecott QC urged the court to dismiss the claim on the grounds that he was protected by parliamentary privilege.

The Speaker's submission says: "If the concept of 'effective repetition' is to embrace a mere refusal by a witness to add to his parliamentary evidence, that witness will be placed in the impossible position of either disavowing his parliamentary evidence (and thus of running the risk of parliamentary proceedings against him for contempt) or of being seen to have adopted the evidence, thereby exposing himself to the risk of defamation proceedings.

"If the case law were to develop in that direction, it would have a serious and substantial chilling effect on witnesses and members and damage the ability of parliament to inquire into matters of national controversy. In the Speaker's submission, such a result cannot be in the public interest.

"There is a clear risk that a witness to a committee will feel inhibited in giving evidence if he knows he runs the risk of falling into an unavoidable trap of exposing himself to a subsequent inquiry in court proceedings as to his motives in giving evidence."

Judgment is awaited.