Mr Portillo hinted that he was also dismayed by William Hague's decision not to investigate the party's mayoral candidate before he was selected.
Labour threatened to make Lord Archer the central issue of the by-election, pointing out that the two men campaigned together just two weeks ago. Labour is to use a photograph of Mr Portillo and the Tory peer on one of the billboards to be driven around the constituency in the next few days.
Mr Portillo said that he let Lord Archer campaign with him simply because he was the party candidate for mayor. He stressed: "I was not one of Lord Archer's backers."
When asked if the revelations would affect his campaign to return to the Commons, Mr Portillo said: "I hope not. But I am not naive about this. It won't make people more enthusiastic. What we have to show is that it is still important to vote. I am embarrassed by the fact that Jeffrey has resigned. Of course I am; all Conservatives are."
Mr Hague also revealed his uneasiness yesterday when he pulled out of a planned visit to Kensington and Chelsea after the gay rights activist Peter Tatchell sabotaged the event.Reuse content