Turns out there's a
wikipedia page about the suit (I should have known). The columnist described Liberace as ""...the summit of sex - the pinnacle of masculine, feminine and neuter. Everything that he, she and it can ever want... a deadly, winking, sniggering, snuggling, chromium-plated, scent-impregnated, luminous, quivering, giggling, fruit-flavoured, mincing, ice-covered heap of mother love." Even in 1956, that would have been way over the line in any US paper. Maybe not in a British tabloid.
Liberace also had a run-in with cartoonist Al Capp in the 50s, although it wasn't about his sexuality. Capp's Li'l Abner comic parodied a number of politicians and celebrities over the years. Most of them took it in stride. Not Liberace. Capp introduced a character named Loverboynik, a narcissistic pianist who closely resembled Liberace. When Liberace threatened to sue for libel, Capp said he would testify in court that there was no comparison because Loverboynik was a much better pianist. No suit was filed.