In an astonishing open letter to all Conservative association chairmen, the Prime Minister said that the Commons had "Draconian powers" to act against wrongdoers.
Although it did not mention Mr Hamilton by name, the letter's message was clear: "All these many issues may be unre-solved now but they won't remain unresolved for long," it said.
Mr Hamilton is still protesting his innocence, but the Prime Minister's action could force him to stand down within the next 48 hours to limit the damage to the Tory election campaign.
Mr Hamilton's resignation as an MP would put intense pressure on other Tory MPs under investigation by Sir Gordon Downey, the Parliamentary Commissioner on Standards, in the "cash for questions" scandal, including Michael Brown, the MP for Brigg and Cleethorpes.
It follows the resignation last week of Tim Smith, the Tory MP for Beaconsfield, after admitting taking cash from Mohammed al Fayed, the owner of Harrods, who claimed he also stuffed pounds 50 notes into brown envelopes for Mr Hamilton.
Yesterday's move was being read as a last-ditch attempt to persuade the Tory association in Tatton not to endorse Mr Hamilton as its candidate at his adoption meeting on 7 April, and as a final appeal to get him to stand down.
The report of the Commons Select Committee on Standards and Privileges would be published after the election and if it criticised Conservative MPs, Mr Major said: "I for one will wish Parliament to act quickly and decisively to uphold its reputation.
"The House of Commons has Draconian powers. The Conservative Party will support their use if criticism is severe enough to merit it. It can, of course, also withdraw the whip if that seems appropriate."
Mr Major will today rein-force the message with a Westminster press conference, which is now certain to be dominated by questions of sleaze. By tackling the issue head-on, the Prime Minister is attempting to burn out the sleaze controversy and get the Conservatives back on track before the launch of their election manifesto tomorrow.
Unsubstantiated allegations "should not cheat the electorate of a debate about which party is best suited to form the government for the next five years", Mr Major wrote.
A senior party source said last night: "The party is frustrated that the election campaign has been diverted from the real issues. The Prime Minister is not ducking these issues. He is willing to deal with them, and answer questions."
Disclosing his frustration at his failure to move on to policy issues, Mr Major said under Tory party rules, he did not have the power to impose new candidates on the constituencies, but said: "The decision to contest the seat is for the candidate."
The Conservative campaign risks becoming more mired in sleaze allegations of cash for questions against Mr Hamilton, and the embarrassing "kiss in the park" photographs of Piers Merchant, MP for Beckenham, at a time when Labour strategists believed the public was becoming tired of the sleaze issue.
Unveiling Labour's campaign slogan "Britain deserves better", Mr Blair yesterday said he wanted to raise the campaign above sleaze. He announced that he had ordered the "two-faced" John Major posters to be replaced with positive messages on new sites across Britain. "Sleaze may hurt the Tories, but it hurts politics too. It hurts this election. It helps nobody."
The launch of Labour's campaign in the sumptuous grounds of a Kent country house hotel was intended to focus Labour's appeal at Conservative voters in the key Tory marginals.
While Mr Major fights sleaze, Alan Howarth, the Tory defector to Labour, will today be used by his new party's leadership to appeal to floating Conservative voters to trust Mr Blair, as the two main parties begin their election campaigns in earnest.
Giving top billing to Mr Howarth, the former Tory MP for Stratford-upon- Avon, in Warwickshire, Labour campaign strategists led by Peter Mandelson are changing the tone of their campaign to avoid alienating Conservative voters.
Flanked by Mr Blair and the shadow Chancellor, Gordon Brown, Mr Howarth, who was recently selected for the safe Labour seat of Newport East, will tell disillusioned Tories that the Conservatives will become more extreme if they win the election.
The Prime Minister's attack on sleaze came after signs of disarray in the Conservative camp over how to handle MPs who refused to quit. The day began with a party grandee, Dame Jill Knight, signalling that the Tory leadership had given up its hopes of dumping the MPs after a weekend of pressure to get them to go gracefully.Reuse content