As George W Bush prepares to leave the White House, at least one unpleasant episode from his unpopular presidency is threatening to follow him into retirement.

A $70m lawsuit filed by Dan Rather, the veteran former newsreader for CBS Evening News, against his old network is reopening the debate over alleged favourable treatment that Bush received when he served in the Texas Air National Guard during the Vietnam war. Bush had hoped that this controversy had been dealt with once and for all during the 2004 election.

Eight weeks before the 2004 presidential poll, Rather broadcast a story based on newly discovered documents which appeared to show that Bush, whose service in the Texas Air National Guard ensured that he did not have to fight in Vietnam, had barely turned up even for basic duty. After an outcry from the White House and conservative bloggers who claimed that the report had been based on falsified documents, CBS retracted the story, saying that the documents' authenticity could not be verified. Rather, who had been with CBS for decades and was one of the most familiar faces in American journalism, was fired by the network the day after the 2004 election.

He claims breach of contract against CBS. He has already spent $2m on his case, which is likely to go to court early next year. Rather contends not only that his report was true - "What the documents stated has never been denied, by the president or anyone around him," he says - but that CBS succumbed to political pressure from conservatives to get the report discredited and to have him fired. He also claims that a panel set up by CBS to investigate the story was packed with conservatives in an effort to placate the White House. Part of the reason for that, he suggests, was that Viacom, a sister company of CBS, knew that it would have important broadcasting regulatory issues to deal with during Bush's second term.

Among those CBS considered for the panel to investigate Rather's report were far-right broadcasters Rush Limbaugh and Ann Coulter.

"CBS broke with long-standing tradition at CBS News and elsewhere of standing up to political pressure," says Rather. "And, there's no joy in saying it, they caved ... in an effort to placate their regulators in Washington."

Rather's lawsuit makes other serious allegations about CBS succumbing to political pressure in an attempt to suppress important news stories. In particular, he says that his bosses at CBS tried to stop him reporting evidence of torture at Abu Ghraib prison in Iraq. According to Rather's lawsuit, "for weeks they refused to grant permission to air the story" and "continued to raise the goalposts, insisting on additional substantiation". Rather also claims that General Richard Meyers, then head of the Joint Chiefs of Staff, the top military official in the US, called him at home and asked him not to broadcast the story, saying that it would "endanger national security".

Rather says that CBS only agreed to allow him to broadcast the story when it found out that Seymour Hersh would be writing about it in the New Yorker magazine. Even then, Rather claims, CBS tried to bury it. "CBS imposed the unusual restrictions that the story would be aired only once, that it would not be preceded by on-air promotion, and that it would not be referenced on the CBS Evening News," he says.

The charges outlined in Rather's lawsuit will cast a further shadow over the Bush legacy. He recently expressed regret for the "failed intelligence" which led to the invasion of Iraq and has received heavy criticism over the scale and depth of the economic downturn in the United States.