Norman Lamont, the former Chancellor, was overruled by John Major to put interest rates up to 15 per cent on Black Wednesday, The Independent has learnt.
Mr Lamont has told friends that he could have resigned at that moment but to do so would have brought John Major and the Government down, and precipitated a deeper collapse in confidence in the pound.
The former Chancellor, Mr Major's leadership campaign manager, is bitter over being made the scapegoat for the debacle over Britain's ejection from the Exchange Rate Mechanism, and privately blames the Germans, who refused his appeals for help by curbing their interest rates, and Mr Major, for the crisis.
Mr Lamont, who is considering trying to set the record straight by writing his own account of the events surrounding Black Wednesday - 17 September 1992 - has refused to give interviews to current programmes being screened about the ERM crisis, which many senior Tories believe led to the Tory defeat.
The programmes describe how the former Chancellor was forced to raise interest rates to 12 per cent to try to stem a run on the pound. But they do not report that when that rise failed, Mr Lamont told Mr Major he should announce that Britain was withdrawing the pound from the ERM. Mr Major refused, and insisted on a further hike in interest rates to 15 per cent, only to be forced to accept defeat later that day. But it was Mr Lamont who was made to take the blame.
It also emerged yesterday that Mr Major's attempts to stop the Murdoch press turning against the Tories backfired when he organised a dinner for Margaret Thatcher and Rupert Murdoch. Instead of urging Mr Murdoch to back the Tories, Baroness Thatcher praised Tony Blair, according to the former Sunday Times editor, Andrew Neil in Bye Bye Blues, a programme about the Tory election disaster screened on Channel 4 last night.
"Murdoch and Thatcher, his heroine, had this dinner, talking about British politics and it was Murdoch who expressed a reservation about Blair. He said: 'Well, I'm not quite sure.' To which Thatcher said: 'Don't worry about Tony. He's fine. He's a patriot'," said Mr Neil.
The Sun declared for Tony Blair on the first day of Mr Major's election campaign, which had a devastating impact on Tory morale. Mr Hague has to lift his party from its demoralising defeat at next week's Conservative Party conference.
Mr Hague was due to get the result of the ballot of Tory members on leadership and his call for reform of the party after counting went into the second day at Conservative Central Office yesterday.
The party leadership defended the conduct of the ballot, which some unions said would have been illegal if they had used a similar practice. The papers are being kept locked by Coopers & Lybrand, who are overseeing the ballot, and the result will not be announced officially until next Tuesday, the first day of the Tory conference.
Senior Tory sources admitted they expected the result to leak out. The turnout was more than 100,000 - higher than expected. Mr Hague has threatened to resign the leader ship, if he loses, but that is not likely.Reuse content