Explaining the difference of treatment between Mr Hamilton as Minister for Corporate Affairs, and as a Conservative candidate in the election, the Prime Minister said that it had not been possible for him to remain in post as a minister with such allegations hanging over him.
But he drew a distinction between that, untenable, position, and Mr Hamilton's position as a Conservative candidate in Tatton for next month's election, saying that he was innocent until proved guilty.
Mr Major said: "If he was a minister and if the accusations infringed on his capacity to do his job in any way, then clearly ... no stain of that kind would possibly be something you could ignore, if someone was a minister."
He added: "The key point is whether unsubstantiated charges ... and let us be clear that is what we are still talking about - whether unsubstantiated charges affect the capacity of a minister to properly carry out his job in government.
"If it does, then the wider public interest requires that the minister - even though he may be shown subsequently to have behaved perfectly properly - it may be appropriate for them to stand aside."
That is why Mr Hamilton, who had been appointed a minister in April 1992, after the election, had been forced to resign in October 1994.
The Prime Minister repeatedly insisted it would be unfair to demand - as Conservative MPs did on Sunday - that Mr Hamilton should stand aside as a Conservative candidate, pending an examination of his case by Sir Gordon Downey, Parliamentary Commissioner for Standards, and the Standards and Privileges Committee that will be formed in the new parliament.
But John Prescott, Labour's deputy leader, pointed out that according to an alleged transcript of evidence given to Sir Gordon by Mr Hamilton, the Tatton MP had, among other things admitted that he had lied to Michael Heseltine, then President of the Board of Trade, about pounds 10,000 he received from Ian Greer, a public relations consultant, and that he had lobbied ministers without declaring his financial interests.
Mr Prescott said yesterday: "Although Mr Hamilton has admitted wrongdoing, the Prime Minister has chosen to ignore his public admission of guilt."
Another of Labour's target MPs, Michael Brown, Conservative MP for Brigg and Clee- thorpes, could face moves to deselect him as a candidate over his involvement in sleaze allegations, local Conservative Association sources have told The Independent.
Activists in Cleethorpes, unhappy after Mr Brown admitted not registering his payments as a lobbyist for a United States tobacco firm for several years, are canvassing the electorate to see whether the party risks defeat if he stands as their candidate.
If the association dissidents decide that the seat, where Labour need only a 6.1 per cent swing, is vulnerable if Mr Brown stands, they will push for a new candidate at the formal adoption meeting on 11 April.Reuse content