Giving up! Pink faces all round

Tories reel as MP is accused of adultery on day Smith departs

The Conservative sleaze crisis erupted again last night after the Sun revealed that the Tory MP and ministerial aide Piers Merchant had allegedly been having an adulterous affair with a 17-year-old nightclub hostess.

The latest allegation could not have been more cruelly timed, coming as one festering Tory boil was lanced with the resignation of Tim Smith as Conservative candidate for Beaconsfield in the wake of continuing accusations over cash-for-questions.

There was strong speculation among Tory MPs that Mr Smith's departure had been pressed on him by party bosses hoping to damp down the damage being caused by sleaze.

But Neil Hamilton, who, like Mr Smith, also stands accused of accepting cash for Commons questions, steadfastly refused to follow suit in Tatton. Today's Sun revelations will leave John Major reeling on the ropes.

The Conservative campaign has still to take off and is still trailing far behind in the polls - MORI in today's Times shows Labour 21 points ahead - and the Easter weekend and April Fool's Day now force an effective five-day break, eating into precious campaign time.

The Sun claims that Mr Merchant, 46, a father of two, and Parliamentary Private Secretary to Peter Lilley, Secretary of State for Social Security, had a relationship with the teenager while his wife stayed at home in his Beckenham constituency in Kent.

The report claims the two met last October when the girl, Anna Cox, volunteered to help with campaign leaflet deliveries. The newspaper publishes photographs of them kissing. The MP denies the affair: "Anna is a dear friend of mine and has been helping my campaign. But there is no question of us having an affair. I have never made love to her," he tells the Sun. He said last night he will make a statement today.

Miss Cox says: "I'm not old enough to vote, but I'm old enough to know when I've been used."

The report came hours after Tim Smith, stood down as candidate for Beaconsfield. Announcing his retirement from politics, Mr Smith - who has admitted receiving up to pounds 25,000 in cash from Harrods' owner Mohammed al Fayed for asking parliamentary questions - blamed the leak of his evidence to the inquiry being held by Sir Gordon Downey. It "has made my course of action inevitable with its complete disregard for both parliamentary privilege and natural justice", he said. However, he gave no explanation about his relationship with Mr Fayed and made no apology. He said his actions were only ever prompted by "my best judgement of where the interests of the country and my constituents lay".

His former constituency vice-chairwoman, Caroline Strafford, said: "Beaconsfield is the third safest Conservative seat in the country and the 30,000 or more Conservative electors who last voted for Tim Smith have to be really confident that they have the best Member of Parliament." She said she felt local people were "disappointed" with Mr Smith.

Mr Hamilton, however, shows no sign of bowing to pressure. His constituency chairman, Alan Barnes, said of Mr Smith's departure: "The two cases are totally different. Mr Smith admitted from the beginning he had accepted money. Neil Hamilton has consistently denied accepting cash for questions."

However, evidence to the Downey inquiry shows that Mr Hamilton accepted "secret commissions", worth pounds 10,000, from the lobbyist Ian Greer.

Mr Major refused to comment about Mr Smith. Conservative Central Office said it was sad to see him go. "He has acted with good grace and dignity."