The corporate world is gearing itself up for a high-profile libel action in which the winner might well also turn out to be the loser. Tesco is suing The Guardian over stories in the newspaper saying the supermarket group was avoiding £1bn tax by using offshore vehicles.

It looks set to be messy. The Guardian chairman, City bigwig Sir Paul Myners, has been dragged in because Tesco’s chairman allegedly warned him the story was incorrect. The newspaper’s chief executive is in an invidious position too because she is a non-executive director of the retailer. It turns out the Guardian Media group uses similar offshore structures for its own acquisitions.

For connoisseurs of libel law, by the way, Tesco says its avoidance (the newspaper never alleged evasion) totals only £23m, not £1bn. So it is the degree that is being disputed, not the principle. But the detail is not important: what matters are the headlines that this spat will generate and the effect on the goodwill of two retail brands.

Tesco cites customers – presumably Guardian readers – who have deserted it because of the claims, but as the legal action progresses readers of others papers will become aware of the allegations and make their own premature judgements.

The risk to Tesco is that in protecting its reputation is appears to be a business giant suppressing a paper that prides itself on press freedom. The Guardian is no small organisation but its ownership by a trust ensures it retains a loyal following from those who regard it as outside the corporate system.

This battle has the appearance of a Goliath versus David fight – and remember who won that. Tesco should look at the MacLibel case: after years of dispute, the hamburger giant won but it was the protestors that gained the sympathy and McDonalds is still regarded as a representative of big bad business.

Tesco may well be in the right. It may win its case or – more sensibly – settle out of court. It may donate its winnings to charity. But it is in danger of losing a lot of gooodwill, especially from the sector of the public The Guardian represents. Being right, and having the right to sue, may not add up to making it a winner.

Tesco was once sufficiently confident it would have ignored such attacks: perhaps the worrying aspect of this storm in a tea cup is that the retailer now thinks it needs to retaliate.

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