Mr Hamilton, former Conservative minister for corporate affairs, is suing Mr Fayed over allegations in a Channel 4 Dispatches documentary that he accepted cash, gifts and free holidays for asking questions in the Commons beneficial to the Harrods owner.
The court heard him described as "a desperate man with nothing to lose" who took money from Mr Fayed and lied about it. George Carman QC, for Mr Fayed, said: "You are a greedy man ... Sadly, you were more than content to take the generous payments made to you by Mr Al Fayed, just as you have subsequently set out to deny their receipt."
Mr Hamilton retorted: "I have never received a penny ... from Mr Al Fayed. I am not at all desperate ... I have had to chase the law, I have lost my seat and my livelihood and I have put on the line my last penny. I have brought this action; I am prepared to be cross- examined by the most fearsome advocate in the land ... At times I have behaved with a lack of candour, but the one thing I am not is corrupt."
The court was told Mr Hamilton had written one letter to the minister Peter Lilley and one to Lionel Blumenthal, Mobile's then UK group taxation manager, for pounds 10,000.
Mr Hamilton agreed it would have been "corrupt" to ask for payment for amendments to the Finance Bill, which was designed to save the oil industry pounds 70m in taxes in one year.
Mr Carman said: "Therefore what you have got to do is to explain what services you have performed ... which could possibly have justified a fee of pounds 10,000 unless it was moving the amendment to this Bill ... is it not totally plain to you that a fee of pounds 10,000 could only be justified by reference to the fact that you were engaged in this parliamentary action of promoting the amendment of the Bill?" Mr Hamilton denied it.
Mr Carman reminded Mr Hamilton he had denied lying to Michael Heseltine, then deputy prime minister, over two commission payments he had received from the political lobbyist Ian Greer but believed he had shown a lack of candour. Mr Carman asked: "If, when you answer someone's question you show a lack of candour, do you still say you are not telling the whole truth?" Mr Hamilton said it was "impossible to answer a question couched in terms of such generality".
Mr Carman told the jury Mr Hamilton, by admission of his counsel, had become "an unemployable pariah, an outcast" after by the report of Sir Gordon Downey, then the parliamentary commissioner and the Select Committee on Standards and Privileges, before Mr Fayed made the allegations in the television programme. Mr Carman said Mr Hamilton was now prepared to lie himself while accusing Mr Fayed and his witnesses of perjury.
Under cross-examination Mr Hamilton abandoned the claim by his counsel that Philip Bromfield, a doorkeeper employed by Mr Fayed, had committed perjury. But he maintained Alison Bozek, a former personal assistant of the Harrods owner and Iris Bond, another PA still employed by him, had lied under oath.
Mr Hamilton was in turn accused by Mr Carman of lying to Mr Heseltine and others over the amendment to the Finance Bill. Mr Hamilton said his "lack of candour" was because he did not have any faith in getting justice. The case continues.