CHRIS BLACKHURST, Westminster Correspondent Plaintiffs: Ian Greer (left) and Neil Hamilton will sue for libel
Evidence that government ministers received election expenses from a leading political lobbyist will surface next month in a libel trial which will be deeply embarrassing for the Government during the Tory party conference.
The Prime Minister will be subpoenaed along with Michael Heseltine, the Deputy Prime Minister, Sir Robin Butler, the Cabinet Secretary, and former Tory Chief Whip Richard Ryder, to give evidence at what promises to be the most sensational political trial for decades.
Ian Greer, the parliamentary lobbyist who acts for some of Britain's biggest businesses, made donations towards the general election expenses of Conservative candidates in key marginal seats. One of those Tories, David Mellor, the former Cabinet minister, has confirmed that he received the cash which went into the "fighting fund" for the 1987 general election campaign in his Putney constituency.
Other Tories, including one current minister, are also understood to have accepted payments from Mr Greer.
While most of the money was directed to the Tories, two senior Labour figures are also likely to be named as having had a donation to their election expenses from Mr Greer.
The evidence will expose a gap in the rules covering election expenses. By taking money from Mr Greer, the MPs and the lobbyist did not commit any offence or breach any rule: the rules require the MPs only to stay within the election limit, currently pounds 6,000; and to list what they spend the cash on. They do not have to disclose where it came from.
The claims will arise during the libel trial brought by Neil Hamilton and Ian Greer against The Guardian newspaper over the "cash for questions" affair, due to start early next month, at the beginning of the Labour party conference.
Conservative managers were already fuming at the timing of the trial and the confirmation that Mr Major, Mr Heseltine and Sir Robin will be required to appear to explain the circumstances around Mr Hamilton's resignation as trade and industry minister in 1994.
The claims over election expenses will send Tories, hopeful of a successful conference to kick-start their election campaign, reeling.
By making donations direct to MPs' constituency associations, there is no danger of the money being swallowed by Conservative Central Office. Some donors regard it as a more efficient way of giving aid.
Mr Mellor has admitted to receiving pounds 500 from Mr Greer in May 1987. Payment was made by cheque sent from Mr Greer's home address, which was then in his Putney constituency, to Mr Mellor's local party agent. He viewed it as a personal donation from Mr Greer.
The payment, the only one to Mr Mellor, was noted in a ledger kept by Mr Greer, detailing cash to MPs.
The MP for Putney is understood to be furious at the prospect of having his name brought up in the trial.
The four-week trial will cast a huge shadow over the party conferences. Tories are incredulous that Mr Hamilton and Mr Greer, both of whom are seasoned political operators, were prepared to countenance going into court during the critical conference season. Solicitors for The Guardian said the decision to hold the trial during the conferences was made by the plaintiffs, not the newspaper.
Mr Mellor declined to comment. Mr Greer passed questions to his solicitor, who said he was unable to comment.Reuse content