Labour officials said they hoped the Liberal Democrat candidate in Tatton, Cheshire, would also withdraw, and that a figure from outside politics would emerge to stand as the only challenger to Mr Hamilton.
A spokesman for Tony Blair said last night that an election in Tatton on any issue but sleaze could only be held if Mr Hamilton stood down. So far, the former minister, who has been accused of taking money from Mohammed al Fayed, the owner of Harrods, in return for asking parliamentary questions, has refused to resign. Mr Hamilton, who has protested his innocence, has received the backing of his party, locally and nationally.
Piers Merchant, the Conservative MP for Beckenham who has been accused of having an affair with a 17-year-old nightclub hostess, was also under increasing pressure. Brian Mawhinney, the Tory chairman, suggested that his planned meeting with local party officers next Tuesday should be be brought forward.
Labour's Tatton candidate, Jon Kelly, 39, a railway manager, will today announce his departure from the race in a gesture designed to exert intense pressure on the Conservative central hierarchy. The Liberal Democrats have said they are considering the idea of withdrawing their candidate.
Mr Blair's spokesman said he was certain that a non-political challenger would come forward. Labour had no particular individual in mind. It seemed possible that a local vicar or magistrate might step forward. All attempts to raise issues such as crime, education and jobs in Tatton had failed, Labour said. The only thing that anyone was talking about locally was the cash-for-questions crisis.
The spokesman said: "It is nobody's fault but the Tories' that the election is being dominated by the aura of sleaze generated by the cash-for-questions scandal and Mr Major's apparent determination to avoid the inquiry being completed in time for the election."
The allegations hit the headlines again earlier this month amid claims that the Prime Minister had closed Parliament early for a long campaign in order to suppress a report on the matter by the Parliamentary Commissioner for Standards, Sir Gordon Downey.
The chairman of the Liberal Democrats' election campaign, Lord Holme, said the idea of a single "anti-sleaze" candidate was worth considering. He also suggested that all Conservatives should put the words "anti-sleaze" on the ballot paper next to their names.
"Neil Hamilton should join Tim Smith and go in days, if not in hours. If he does not, his constituency is going to look for all kinds of ways to get rid of him," he said.
A Conservative Party spokeswoman described the initiative as "a pathetic gimmick".
"Neither Labour nor the Liberal Democrats have a cat's chance in hell of winning this seat. Trying to win by stunts rather than by persuasive policies is typical of Labour," she said.
Mr Hamilton, who has a majority of 22,500 over Labour, will still be challenged by the Natural Law Party, however.
Mr Hamilton's wife, Christine, said at the couple's home in the constituency that they had no comment to make.
In Beckenham, Mr Merchant disappeared from view yesterday amid mounting pressure for him to resign.
Party members in his south London seat told reporters that the MP "had gone to the country and was travelling around various locations". He would not be back until Monday or Tuesday.
However, senior figures in the national Conservative Party were dropping increasingly strong hints yesterday that he should go. Mr Merchant has not yet been formally adopted as candidate, leaving the association free to choose someone else should they wish.
Dr Mawhinney said he hoped the Beckenham branch meeting could be "called quickly and that we can move on to the substantive issues which will determine the outcome of this election campaign".
But Charlie Priest, a member of the executive committee, said: "To hell with Central Office. If they can't back us, we won't back them. It is up to us what we do with our MP."
The family of yet another embattled Conservative MP, Allan Stewart, appealed for privacy as he received treatment for "nervous exhaustion" near his home in Scotland.
Mr Stewart, who is the MP for Eastwood, announced that he was to stand down last week after newspaper reports that he had been seen with a woman he had met in an alcohol treatment clinic.Reuse content