Jonathan Aitken, the Treasury Chief Secretary, is to leave the Cabinet today. From the backbenches he will conduct the fight to clear his name in libel proceedings over allegations about his business activities.
The move, which the Treasury was unable to confirm last night, is thought to be by mutual agreement and one ministerial colleague of Mr Aitken suggested that the Chief Secretary had volunteered to go.
Friends said that his return to the backbenches would allow Mr Aitken, a close ally of the Prime Minister, more time to pursue libel actions against the Guardian and Granada TV.
Rumours of Mr Aitken's resignation were briefly raised late last night in the Commons by Brian Wilson, a Labour trade spokesman, who said the Commons had been "misled" over the arms manufacturer BMARC, of which Mr Aitken was a non-executive director in the late1980s. He said that if new information had emerged during inquiries by Michael Heseltine, President of the Board of Trade, MPs should be told first.
The Commons was told by Mr Heseltine last month that naval guns shipped by BMARC to Singapore may have ended up in Iran, in breach of UN and British arms embargoes. The Trade and Industry Select Committee launched an investigation into the BMARC contract - first reported in the Independent last March - and announced that Mr Aitken would be called to give evidence.
Mr Aitken, who has been in government since 1992, first as Minister for Defence Procurement, has always denied that he was aware the guns were destined for Iran.
After reports in the Guardian and Granada's World in Action about his business links with leading members of the Saudi royal family and a company run by two Lebanese brothers, Mr Aitken issued writs for libel.
In a remarkable press conference, he declared that he would take up the "simple sword of truth and trusty shield of British fair play" to "cut out the cancer of bent and twisted journalism".
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