Charles Wardle told the Commons that when he had been the minister responsible for immigration, he had been instructed to turn a blind eye to a damning DTI inspectors' report on the Al Fayed brothers' take-over of the London store Harrods in order to take a more favourable view of their appeal for British citizenship.
Mr Wardle said he was pressed to reverse a decision by the immigration section of the Home Office which rejected the application by the Al Fayeds.
He later concluded the Al Fayeds had been "stitched up" by the DTI inspectors' report into their take-over of the House of Fraser, but to ignore the report would have been unlawful, compromised the highest standards of the civil servants in the immigration section of the Home Office and would have led to abuses of immigration rules.
Mr Wardle did not name Mr Howard, but it is likely to have inflicted further damage on his campaign for the Tory leadership following criticism from two subordinates. Peter Lloyd and Ann Widdecombe said there was "something of the night" about Mr Howard. He was Mr Wardle's boss at the time, and was at the DTI at the height of the Guinness case.
Mr Wardle focused on his long-standing demands for a shake-up in DTI investigations, alleging ministerial pressure to capture "scalps" including Lord Spens, a merchant banker, with the Guinness take-over inquiry in the run-up to the 1987 general election, and the investigation into House of Fraser.
"My objective is to put right what I consider to be wrongs. Persistent press inquiries have related to the Conservative leadership contest. I have related time and again to journalists that I was seeking the debate months before the leadership contest was contemplated," he said.
"Having looked back at the vitriolic and unscrupulous warfare between Tiny Rowland and Mohammed al Fayed, I have come to the fairly dramatic conclusion that the Al Fayeds were stitched up by a DTI inquiry."
In a reference to the "sleaze" row in which Mr Al Fayed alleged he had paid some Conservative MPs in pounds 5 notes stuffed into envelopes, Mr Wardle added: "I can understand the general distaste for their unprincipled and unsavoury use of brown envelopes and other inducements ... And yet injustice is injustice."Reuse content