  We report the detection of Ne VIII in a z_abs = 0.59961 absorber towards the
QSO PG 1407+265 (z_em = 0.94). Besides Ne VIII, absorption from HI Lyman series
lines (HI 1025 - 915), several other low (C II, N II, O II, and S II),
intermediate (C III, N III, N IV, O III, S IV, and S V) and high (S VI, O VI,
and Ne VIII) ionization metal lines are detected. Disparity in the absorption
line kinematics between different ions implies that the absorbing gas comprises
of multiple ionization phases. The low and the intermediate ions (except S V)
trace a compact (~ 410 pc), metal-rich (Z ~ Z_sun) and over-dense (log n_H ~
-2.6) photoionized region that sustained star-formation for a prolonged period.
The high ions, Ne VIII and O VI, can be explained as arising in a low density
(-5.3 < log n_H < -5.0), metal-rich (Z > Z_sun) and diffuse (~ 180 kpc)
photoionized gas. The S V, S VI and C IV (detected in the FOS spectrum) require
an intermediate photoionization phase with -4.2 < log n_H < -3.5.
Alternatively, a pure collisional ionization model, as used to explain the
previous known Ne VIII absorbers, with 5.65 < log T < 5.72, can reproduce the S
VI, O VI, and Ne VIII column densities simultaneously in a single phase.
However, even such models require an intermediate phase to reproduce any
observable S V and/or C IV. Therefore, we conclude that when multiple phases
are present, the presence of Ne VIII is not necessarily an unambiguous
indication of collisionally ionized hot gas.
