THE ASHCROFT AFFAIR: How two tycoons cooked up a secret deal to help the Tory party

AS THE champagne flowed at Rupert Murdoch's Christmas party last Thursday, Baroness Thatcher was deep in conversation with the editor of The Times newspaper, Peter Stothard.

Other guests at the tycoon's penthouse overlooking Green Park, in central London, raised eyebrows. The Times had been out of favour with the former prime minister since the Tory treasurer, Michael Ashcroft, launched a libel action against it in July over allegations relating to United States Drug Enforcement Administration files on him.

Most of those present did not know it at the time, but yesterday they realised the friendly chat was a sign that a deal was on the cards.

"It was remarkably amiable," one observer said yesterday. "Margaret and Denis Thatcher are friends of Ashcroft, and they were very angry with The Times."

There were several guests who knew what was happening, or at the very least must have been able to read the runes. William Hague, the Tory leader, and his party chairman, Michael Ancram, will have had one eye on the conversation in the corner. Although Central Office sources denied yesterday that they had put any pressure on Mr Ashcroft to settle, their interest in the case must have been intense.

Two guests certainly knew what was happening. The first was Lord Bell, formerly Lady Thatcher's favourite public relations man and now handling media affairs for Mr Ashcroft. He had been approached by the latter for advice on the deal but is believed to have argued that since he was likely to win the libel action, he should press ahead with it.

The second was Jeff Randall, editor of Sunday Business. Mr Randall - a former employee of Mr Murdoch and friendly with both him and Mr Ashcroft - had already acted to get the two sides talking.

Just 10 days ago, neither The Times nor Michael Ashcroft were talking publicly of peace. Last Tuesday, they were in court trying to thrash out a date for the libel case. According to the Ashcroft camp, tentative talks had already begun, although sources at The Times say the decision to negotiate was not made until Tuesday.

Although both sides had been bullish since the legal action started, with Times journalists confident they had ample new material on Ashcroft and the latter equally sure he could win damages on the allegations of drugs and money-laundering, it had become clear the case was going to drag on. It was also clear that the main allegations by The Times would not hold water.

More importantly for Mr Ashcroft, the trial date was receding fast into next autumn. Access to the judge, Mr Justice Morland, had been difficult because he was also sitting in Neil Hamilton's libel case against Mohamed Al Fayed, and The Times's QC, Geoffrey Robertson, was due to go away for an extended millennium break.

It looked increasingly likely the case would take place in October, possibly during the Conservative Party conference. Worse, by then pre-election fever would be running high and the last thing Mr Hague would want was more "sleaze" allegations filling the newspapers. Mr Ashcroft - possibly after discussions with other senior Tories, although Central Office denies this - agreed that his team should put out feelers.

Not being personally acquainted with the Murdoch side, beyond a single breakfast meeting with Mr Stothard before The Times's campaign began to roll, Mr Ashcroft needed a go-between.

Two such fixers immediately presented themselves: the first was Lord Bell; the second was Mr Randall, known to both men. In a move highly unusual for a journalist, particularly the editor of another newspaper, Mr Randall arranged a meeting between them. Later, they spoke on the phone several times.

Last Friday, the day after Mr Murdoch's party, he met his editor to discuss the deal. Mr Stothard, happy that it contained no promise of an apology or payment of damages, was then left to complete the negotiations himself. By Wednesday, a statement was ready for publication.

And so, yesterday, both sides were claiming satisfaction. "Michael's name has been cleared. Now he can get on with his business and with being treasurer, and The Times can go back to being a newspaper," a spokesman for Mr Ashcroft said.

Mr Stothard said he believed the deal was good for both sides. The case might have been the costliest libel action in history, he told a radio interviewer as he dismissed suggestions that he had been left out of the negotiations.

"To say I was excluded from it or that Mr Murdoch imposed a statement on an unwilling editor is nothing but an-all-too-common fantasy," he said.

Mr Randall, who is rumoured to covet a Murdoch editorship, said in a separate radio interview that the deal was an "equal score draw". His aim in bringing the two sides together was to cut the lawyers out, he said. "It was most important to keep the lawyers out. Lawyers are a stumbling block to resolutions in libel affairs. That was the key to it all," he said.

He could not comment on Mr Stothard's feelings about the fact that the deal was done by Mr Murdoch. But despite rumours that The Times's editor might be on his way out, he was greeted as a conquering hero at a party in the Reform Club on Wednesday night. There was applause when he announced the deal and his deputy, John Bryant, toasted Mr Stothard's success.

Times journalists were buoyant about the deal, claiming it would not preclude further exposes of Mr Ashcroft's affairs.

Certainly, no promise was extracted on future reporting of the Tory treasurer's dealings. But the real winner in the affair will not be known for several days, or even weeks. If it becomes apparent that The Times has been silenced, Mr Ashcroft can toast himself with the celebratory glass of champagne that he missed when Mr Murdoch left him off his party list.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The Doctor and Clara have their first real heart to heart since he regenerated in 'Deep Breath'
TV
Life and Style
Apple showed no sign of losing its talent for product launches with the new, slightly larger iPhone 6 making headlines
techSecurity breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Arts and Entertainment
Jamie Oliver
filmTV chef Jamie Oliver turned down role in The Hobbit
News
The official police photograph of Dustin Diamond taken after he was arrested in Wisconsin
peopleDownfall of the TV star charged with bar stabbing
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
tvReview: Top Gear team flee Patagonia as Christmas special reaches its climax in the style of Butch and Sundance
News
people
Sport
Ashley Barnes of Burnley scores their second goal
footballMan City vs Burnley match report
Arts and Entertainment
Peter Mayhew as Chewbacca alongside Harrison Ford's Han Solo in 'Star Wars'
film
News
i100
Arts and Entertainment
Man of action: Christian Bale stars in Exodus: Gods and Kings
film
Arts and Entertainment
Tracy Emin's 1998 piece 'My Bed' on display at Christie's
artOne expert claims she did not
Arts and Entertainment
Catherine (Sarah Lancashire) in Happy Valley ((C) Red Productions/Ben Blackall)
TV
News
Hackers revealed Oscar-winning actress Lawrence was paid less than her male co-stars in American Hustle
people
Arts and Entertainment
Clueless? Locked-door mysteries are the ultimate manifestation of the cerebral detective story
booksAs a new collection of the genre’s best is published, its editor explains the rules of engagement
Sport
Robin van Persie is blocked by Hugo Lloris
footballTottenham vs Manchester United match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Business Manager

£32000 - £40000 per annum: Recruitment Genius: A Business Manager is required ...

Recruitment Genius: Operations Manager

£45000 - £55000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Panel & Cabinet Wireman

£20000 per annum: Recruitment Genius: Panel Wireman required for small electro...

Recruitment Genius: Electronics Test Engineer

£25000 - £27000 per annum: Recruitment Genius: An SME based in East Cheshire, ...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?