Findings of the inquiry, to be conducted personally by Sir John, for his own 'satisfaction and concern', will be published in two or three weeks, he told the Public Accounts Committee last night.
The decision to make the payment was defended again yesterday as the Treasury, under pressure from Gordon Brown, Labour's shadow chancellor, released unpublished guidelines on indemnifying ministers for libel costs, and details of how payments were made. The answers did not satisfy Mr Brown, or opposition MPs, who argued in the Commons that the Chancellor had been the recipient of 'private' legal aid.
The announcement of the inquiry came as it emerged that the two off- licence employees who claimed Mr Lamont had bought champagne and cigarettes from their west London shop were telling lies. They admitted their claims were 'totally fabricated', a Thresher spokeswoman said.
An internal inquiry into the allegations made by David Newton, manager of the Praed Street Thresher branch, Paddington, and John Onanugu, an assistant, ended last night with their suspension 'in line with normal disciplinary procedures'.
Jane Bridges, its public relations officer, said: 'They have said they made it up and that they are very sorry. They say they did not mean to cause Mr Lamont any trouble.'
'Threshergate' began last Thursday with a passing reference to a pounds 17.47 purchase by Mr Lamont in a story in the Sun which said that the Chancellor had breached his credit card limit 22 times in eight years.
Following publication of the Chancellor's credit card records, reporters from the London Evening Standard visited the Thresher shop. Mr Newton and Mr Onanugu were reported to have said the Chancellor had bought champagne and cigarettes worth pounds 17.47 two weeks earlier.
Mr Lamont said that he had bought three bottles of wine from another Thresher branch the day before the alleged visit to Praed Street. Yesterday the Treasury released his copy of the off-licence till receipt to prove his version of events; on Sunday it had released Thresher's copy.
The Thresher statement threw no light on the men's motive and the Evening Standard has said that money was not offered. Some senior Conservatives believe the saga is part of a wider conspiracy to discredit Mr Lamont and oust him from office.
Questions remain over Mr Lamont's future, in spite of the Prime Minister's unswerving support and a determination in government circles not to bow to a perceived anti- Lamont media campaign.
A resignation or sacking is unthinkable before this month's Edinburgh summit, although Mr Lamont could be removed in a new year reshuffle. Some Tory MPs argue that in the interests of stability any reshuffle must wait until after March's Budget.
Complaints made by Mr Lamont through the libel lawyers Peter Carter-Ruck and Partners to newspapers yesterday over allegedly damaging coverage will be met out of the Chancellor's pocket, it emerged yesterday.
That contrasts with the decision last year by the then permanent secretary, Sir Peter Middleton, that the taxpayer should meet a pounds 4,700 bill from the firm for media-related services as he sought to evict Sara Dale.Reuse content