Those close to John Major said the best-selling author was seen as a campaigning asset for the Tories, particularly with the rank and file which the leadership is keen to woo back to the Conservatives.
Lord Archer was refusing to make any comment yesterday about the reports that he placed orders to buy shares in Anglia Television, which were the focus of the Department of Trade and Industry investigation.
The DTI repeated its statement, issued on 28 July, that Michael Hesel tine, the President of the Board of Trade, had considered the inspector's report into a possible breach of the insider trading legislation and had decided to take no further action. Lord Archer made no personal gain from the dealings, alleged to have produced pounds 80,000.
Leading Tory MPs said the clearance given by the DTI for Lord Archer would enable him to take on a campaigning role. 'Jeffrey is a great campaigner, and he would make a good party treasurer,' one government source said.
Friends of Lord Archer believe he will be seeing Jeremy Hanley, the party chairman, soon about a possible campaigning role.
The Securities and Futures Authority, the City regulator, is considering whether it needs to investigate Charles Stanley, the stockbroking firm with which the orders were placed.
The Department of Trade and industry passed the results of its inquiry to the Stock Exchange and the SFA last month. Charles Stanley is a member firm of the SFA, which is the self- regulatory body for stockbrokers.
The SFA is examining the report to decide whether it needs to look at Charles Stanley's role.