I wonder if anybody had any suggestions for how to deal with a cybersquatter. Basically I bought the two domains I required and naively thought nobody else would use the same name for a site. But somebody snapped up a number of lesser domains and has assembled a shabby clone site using free cms software and content from wikipedia.

His desire is to simply confuse users and make me pay an exorbitant sum for the domains - he's hinted but not been foolish enough to say it outright.

I've spoken to a net lawyer who says I've a strong case but the cost of going to icann and launching a case is in the $1,000s.

Does anybody have any suggestions for countering such people?

I believe this squatter has caught you, and there is a possible way just to buy his domain, like many people and legal persons do when they couter cybersquatters. It may cost you less than launching a case...