Nenshi and Wenzel

Calgary home builder Cal Wenzel, right, settled a defamation lawsuit against Mayor Naheed Nenshi in December. (CBC)

Mayor Naheed Nenshi says he plans to vigorously defend himself against a defamation lawsuit filed against him.

Cal Wenzel, the founder of Shane Homes, is seeking $6 million in damages for remarks Nenshi made.

Wenzel said the mayor insinuated he broke election laws and runs a mafia-like organization.

In an Oct. 9 Calgary Eyeopener interview, Nenshi said a video of a private home builders meeting was like a scene "out of the movie [The] Godfather.

When host David Gray attempted to clarify, asking Nenshi if he just called Wenzel the Godfather, Nenshi replied "maybe."

Wenzel says those remarks are untrue and have damaged his reputation. 

'Politicians need to be able to speak on matters of public policy without the fear of being sued.' - Mayor Naheed Nenshi

But the mayor says he is concerned about the effect the lawsuit could have on political debate.

"These types of lawsuits will make it extremely difficult for council members to do their jobs," he said.

"It could discourage people from running for public office if they knew they might be the subject of costly and groundless litigation. Politicians need to be able to speak on matters of public policy without the fear of being sued."

Who pays for lawsuit?

The city's insurer is investigating who will pay for Nenshi's defence against the claim.

β€œIt's worth noting that I'm not a wealthy man. I left the private sector 13 years ago to devote myself to education, public service and community work," he said in a statement.

One political observer believes the mayor and council should be covered.

"He was operating in his capacity ... as mayor about his performance [as] mayor," said Duane Bratt. "To say we wouldn't want politicians protected and have director's insurance today is the equivalent of being sued. I think it's important those people have it."

Although Nenshi has declined to apologize for the remarks he says he is willing to meet with Wenzel.

He says talking about a disagreement is a better way to resolve a dispute than "running to the courts."

As of 2 p.m. MT, Nenshi has still not been served with legal papers β€” nor has he filed a statement of defence.

Wenzel's claims have not been proven in court.

With files from CBC's Scott Dippel