The minister is a rising star in John Major's government and the party's intellectual guru. He discussed, with a senior Conservative member of the Commons Select Committee on Members' Interests, how they should treat the investigation, which was likely to embarrass the Government deeply.
A written account of the talks discloses that two options were mentioned: using the Conservatives' in-built majority on the committee or using the law of sub-judice to forestall a damaging outcome.
Mr Willetts's intervention is being seen as prima facie evidence of an unprecedented interference by the Government in the role of Parliament.
In cases of MPs' misconduct, Parliament acts as a court. Any attempt to interfere with the independent processes of its disciplinary committees could be open to severe criticism.
The new evidence identifying Mr Willetts's part in the Hamilton affair may reach right into Downing Street.
The document had been obtained by the Guardian under subpoena for its defence in Mr Hamilton's libel action against the newspaper, from which he suddenly withdrew last week on the eve of the case coming to court. The paper cannot publish the document because it is required to return anything obtained under subpoena without public disclosure of its contents.
However, it has now been sent to the four most senior Privy Councillors: John Major, Tony Blair, Paddy Ashdown and the speaker of the House of Commons, Betty Boothroyd, by the Guardian's editor, Alan Rusbridger. It is political dynamite, and Mr Ashdown has already called on the Prime Minister to investigate what he describes as a possible perversion of parliamentary procedures.
The document, say sources, is "evidence of a strictly private communication between a member of the Government" - Mr Willetts, then a Tory whip - and Sir Geoffrey Johnson-Smith MP, chairman of the committee.
Last night Sir Geoffrey admitted having a conversation with Mr Willetts but denied that he had been influenced: "There is no reason why people should not, in confidence, get some idea of what is happening, because rumours begin to spread. Certain people like to have some intimation of what we are doing."
Mr Willetts, 40, who could not be contacted last night, is MP for Havant. He is often spoken of as Mr Major's "favourite minister". He headed Margaret Thatcher's Downing Street Policy Unit in the mid-Eighties.
The memorandum which details his contacts with Sir Geoffrey dates back to 1994. The Select Committee on Members' Interests had been asked by the Liberal Democrat MP, Alex Carlile, to investigate allegations that Mr Hamilton had taken cash from Harrod's owner Mohammed Al-Fayed in return for asking parliamentary questions.
Before the inquiry started the Government assigned a whip, Andrew Mitchell, to the committee. He played down the need for a full inquiry. Labour MPs, enraged by the Government's tactics, walked out and refused to sign the Tory majority report, which said that Mr Hamilton should have declared an expenses-paid stay at Mr Fayed's Ritz Hotel in Paris. But the report failed to give a ruling on the cash-for-questions issue because Mr Hamilton had launched his libel action.
Mr Ashdown yesterday wrote to the Prime Minister saying: "I hope you will agree with me about the gravity of the issues this document raises."
Inside Story, pages 16 & 17
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