The Ministry of Defence has been asked by the Cabinet Office to trawl its records for any reports on defence or foreign policy issues submitted to the department by Liam Fox's unofficial aide Adam Werritty, i understands.
If such documents exist, it may leave Mr Fox open to charges that he was using Mr Werritty – whose income supposedly came from wealthy right-wing benefactors – as an adviser and put the Defence Secretary in breach of ministerial rules.
His aides were forced to mollify Mr Werritty yesterday after he was traduced in private briefings to journalists as a "Walter Mitty figure" who was "masquerading" as someone much more influential than he was.
Mr Werritty had already agreed to co-operate in the questioning and had become distressed by the attacks. A senior Tory source said: "It was a strange strategy to take and it has now been discontinued. We are not sure what was supposed to be gained by upsetting Adam Werritty, who says he can show he did not make money out of his contacts with Liam Fox."
Labour last night called on the Government to publish the terms of reference of Cabinet Secretary Gus O'Donnell's inquiry, amid fears that it would not address all the issues about Mr Fox's relationship with Mr Werritty. A source close to the inquiry suggested the investigation was focusing on the question of whether Mr Werritty had received specific payments directly linked to the setting up of meetings with Mr Fox. Mr Werritty is thought to have denied receiving money for this, but admitted receiving income from wealthy individuals, which allowed him to travel extensively with the Defence Secretary.
Craig Murray, a former British ambassador, said he had spoken to someone with access to the Cabinet Office investigation into Mr Fox's relationship with Mr Werritty who told him it was looking only at the question of facilitating meetings.
"The investigation into Werritty's finances will look only at the question of whether he received specific payments that can be linked directly to the setting up of specific meetings with Fox," he said. "The answer is thought to be no; that is what Fox was indicating by his formulation to the House of Commons that Werritty was 'not dependent on any transactional behaviour to maintain his income'."Reuse content