Police to probe business moves by Fox 'adviser'
Donors' fury over lies forced out Tory minister
Liam Fox and his best man Adam Werritty were battling damaging new allegations over their conduct last night.
Britain's former defence secretary faces being dragged into a police inquiry into Mr Werritty, his unofficial "adviser", after Scotland Yard were called in by an MP.
Dr Fox also faces questions over whether he knew Mr Werritty was operating a secret "slush fund" using cash he obtained from donors which he then spent on first-class travel, designer clothes and adult entertainment.
Friends of Dr Fox remained optimistic that an inquiry into the affair, conducted by Gus O'Donnell, the cabinet secretary, would not deliver a harsh verdict when its findings are made known this week.
However, Mr O'Donnell will be under pressure this weekend to deal with the fresh allegations surrounding the affair -- including an alleged promise by Mr Werritty to guarantee donors anonymity when they funded Pargav -- the company set up to further Dr Fox's interest in foreign policy, in a possible breach of strict rules on declaring political donations.
One of the donors said they had been misled over how their money would be spent and had called in lawyers. Another company, whose employee set up Pargav on Mr Werritty's behalf had instituted a formal investigation by a leading city law firm.
Donors are also concerned they were misled by the promise of anonymity, which disappeared when the facts of the affair began to be made public this month.
It was the fury of the donors, many of whom are backers of the Conservative Party, which led to Dr Fox's decision to resign last Friday, saying he had blurred his personal and professional lives.
The former defence secretary's hopes of a cabinet comeback at some point in the future now largely depend on Mr O'Donnell's findings.
In an impromptu reshuffle Prime Minister David Cameron replaced Dr Fox with Philip Hammond, who had been the transport secretary, and promoted Justine Greening into the cabinet to take Mr Hammond's post.
The new questions for Dr Fox and Mr Werritty came as:
• Whitehall sources said Dr Fox had admitted a clear breach of the ministerial code by using Mr Werritty as his unpaid adviser without the prime minister's permission.
• A £3.9bn (€4.4bn) emergency bailout for the Ministry of Defence, secured by Mr Fox before he quit, came to light, underlining the parlous state of the department's finances.
• The chief executive of the American arm of Dr Fox's Atlantic Bridge think tank said Mr Werritty was running a "shell game" and apparently doing no real work.
In potentially the most damaging development, Labour MP John Mann has written to the Metropolitan Police demanding an investigation into whether Mr Werritty committed a crime by calling himself Dr Fox's adviser. Mr Mann said: "I referred the matter to the police to investigate whether there is a potential fraud.
"Mr Werritty gave out business cards saying he was an adviser to Dr Fox. If that is not the case and he was getting money -- for whatever purpose -- by misrepresenting his relationship with the defence secretary, that cannot be right."
Mr Mann also said he would call for police and the Electoral Commission to look at whether Dr Fox could face potential criminal proceedings.
Alistair Graham, former chairman of the Committee on Standards in Public Life, said: "The real question is how is it the Ministry of Defence and officials in Liam Fox's private office were not alerting the permanent secretary that something pretty unacceptable was happening."
Mr Werritty was unavailable for comment last night.