On 9 July 1944, the 11-year-old Ladislaus Lob, his father Izso and about 1,700 other Jews were released from the concentration camp at Bergen-Belsen and taken to safety in Switzerland. Their rescuer was Rezs? Kasztner, "the Jew who had saved more Jews from the Holocaust than any other". David Cesarani, research professor in history at Royal Holloway, University of London, describes him as "unimaginably courageous".

This may sound like a heroic achievement, but Kasztner has long attracted ferocious hostility and, after being savaged in an Israeli court for "selling his soul to Satan", was shot in front of his house in Tel Aviv in 1957.

After a distinguished career as an academic, Lob has now devoted a remarkable book, Dealing with Satan, to unravelling the truth about the man to whom he owes his life.

Lob was born in a small Transylvanian town (then in Hungary but now in Romania), "a Jewish child among Jew-haters", and eventually rose to become professor of German at the University of Sussex. After their traumatic wartime experiences, he says, he and his father slowly tried to rebuild their lives.

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In Switzerland, the young Ladislaus attended a progressive international school in the mountains. His father "had to do something to get out of his refugee camp, so he persuaded the authorities to give him money to learn how to make Swiss cheese. At the age of 50 he went to a French-speaking agricultural college even though he didn't know the language. The idea was to go back to Transylvania with a Swiss cheese-maker who would do the hard work while my father could oversee the operation and become a rich capitalist". This was a scheme doomed to failure in Communist Romania.

Izso Lob was later to contract a kind of arranged marriage through relatives in Israel. "They sent her," Ladislaus says, "we looked at her and said OK. She had a son my age, and the deal was that my father would put him through university - it was a perfectly business-like affair. But he never really got over my mother's death."

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Lob, meanwhile, came to Sussex to teach German for a year in 1963 and, in the easy-going atmosphere of the time, soon found himself with a job for life. "I should have been a German lector, but I had a doctorate and was a little overqualified, so they created a job called tutor in German, which meant that instead of ?700 a year I got ?1,000," he recalls. "After two or three weeks, I was getting my lunch on a tray and the dean came up to me and asked if I wanted to stay on as a lecturer."

Although he now describes himself as "disappointed and disillusioned", Lob well remembers the excitement of joining a radical university that was only two years old. "Everything was possible," he says. "We got rid of old-fashioned departmentalism and embraced interdisciplinarity. I was very proud to be accepted by the institution and much enjoyed the contact with intelligent people who were open-minded and doing something they believed in. Because it was new, they wanted the place to work, the experiment to succeed."

Although he has published a number of books and articles, mainly in the field of German drama, Lob admits - and regrets - that he tended to shy away from topics relating to his childhood or the Nazi period. He seldom visited Israel, where his father spent half the year, and never discussed with him what they had been through during the war.

In 2004, however, Lob translated Nine Suitcases, a Holocaust memoir by the Hungarian journalist Bela Szolt, who had been a fellow prisoner in Bergen-Belsen.

"I wrote a deliberately short introduction," he explains, "where I said that Szolt was part of the group saved by Kazstner. He even promised he'd make my father a cabinet minister when he went back to Hungary and became Prime Minister. And he did make it into Parliament, though he never had a cabinet to offer him a job ... ".

All of which brings us to the extraordinary drama Lob has reconstructed in his new book. By 1944, when the Final Solution was put in motion in Hungary, the Germans badly needed money and raw materials. Kasztner and his colleagues in a Zionist group called Vaada seized the opportunity to propose to Nazi leaders such as Eichmann an elaborate "trucks for Jews" deal. If the deportations were stopped and some Jews released to a neutral country, they would arrange for the Allied governments and leading Jewish organisations to send funds.

Such a deal was never going to happen and Kasztner had no real cards in his hand - he could have been shot or sent to a camp at any time - so his bold tactic was to demand "gestures of goodwill" from the Nazis to convince the Allies that they were serious. It was one such "gesture" that saved Lob and his group, who had been kept alive in comparatively bearable conditions in Bergen-Belsen as a sort of bargaining chip. (Dealing with Satan includes a detached but still harrowing account of Lob's five months in the semi-autonomous "privileged camp", with its cramped conditions, constant noise, cigarette-based economy, "abundance of lectures and debates", political and religious schisms and doctors struggling to provide healthcare without medicine or equipment.)

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Kasztner did have one thing going for him. By 1944, Allied victory looked increasingly likely, so some of the Nazi officials in Hungary were keen on the idea of saving a few Jewish lives as a sort of alibi in case they were captured and accused of war crimes. Yet he was negotiating from a position of abject weakness, and every life he saved was something of a miracle. Or so one might have thought ...

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Once he had gone to live in Israel after the war, Kasztner became part of the ruling Labour establishment under Prime Minister David Ben-Gurion. In the wake of the Holocaust, Israelis were understandably racked with grief and guilt for not having done more to save Jewish lives, but this also led to a particularly vicious political climate in the country. Labour was opposed by the hard-line Revisionist movement, which had always been committed to armed struggle (against the Germans in Europe and the British controlling Palestine until 1948) and suspicious of compromise. A particularly extreme adherent had Kasztner in his sights.

Today, Malkiel Gruenwald would be a deranged blogger, but in 1952 he relied on writing, mimeographing and distributing a series of ranting pamphlets aimed at his political enemies. "My dear friends," one began, "the stench of a carcass fills my nostrils! This will be the choicest funeral! Dr Rudoph Kastner (sic) must be liquidated! ... Because of his criminal machinations and collaborations with the Nazis I consider him implicated in the murder of our beloved brothers."

Kasztner naturally sued for libel.

In court, unfortunately, he faced a brilliant right-wing lawyer called Shmuel Tamir who soon started referring to him as "the accused". "He was a Revisionist," Lob explains. "He wanted to destroy Mapai (Labour) and, when Malkiel Gruenwald approached him and offered his collection of stamps as payment, he immediately saw it as a wonderful opportunity. I imagine he didn't care less whether all the details were true or not. On the other hand, Kasztner was inviting it - he was arrogant and gave hostages to fortune." He had also made the mistake of having an affair with the wife of a man who could have made a vital character witness.

Tamir admitted that Kasztner had saved lives but claimed that these had mainly been his family, political allies and rich friends. Meanwhile, by suppressing what he knew about the death camps, Tamir argued, Kasztner discouraged other Jews from rebelling and thereby facilitated the smooth operation of the extermination process. Far from being a hero, Kasztner - the judge concluded - "sold his soul to Satan".

Gruenwald and Tamir savaged Kasztner because he was the wrong kind of Zionist. But their grotesque claims were taken up by the left-wing British dramatist Jim Allen in his play Perdition, a London production of which was famously cancelled after protests in 1987. According to Lob, the play "lumps all the Zionists together and says that Zionist equals Nazi. Kasztner did this deal with the Nazis, Kasztner was a Zionist, therefore the Zionists sold out to - or, rather, were hand in glove with - the Nazis. It goes back to the Revisionist movement in Israel, who were all saying that Kasztner sold out and agreed to help Eichmann send the Hungarian Jews to Auschwitz in return for saving the 1,700 of us."

As this suggests, those who vilify Kasztner also tend to blame those he saved for surviving at the expense of others. Lob has painstakingly re-examined the evidence, recreated the dramatic story of negotiation and rescue and paid warm tribute to Kasztner and his father for their courage and resourcefulness in terrible times. But what does he make of the suggestion that he is an interested party, with obvious personal reasons for seeing Kasztner in a positive light?

"I have tried to be as objective as I could," Lob replies, noting that he was "glad to find certain facts indicating that Kasztner was OK, one of them being that, when his wife, mother and father-in-law were safe in Switzerland and he could have stayed, he went back to Germany to save more Jews. So I have evidence that Kasztner was acting in good faith that confirms my obvious bias in favour of him. That's all one can do."

Ladislaus Lob's Dealing with Satan: Rezs? Kasztner's Daring Rescue Mission has just been published by Jonathan Cape at ?18.99.

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