Rejecting the call for a 'second opinion', Michael Heseltine's department revealed that the President of the Board of Trade had consulted independent outside counsel before deciding to take no further action after an inspectors' inquiry into the deal.
The Government's firm stand was made clear by Neil Hamilton, junior DTI minister, although Alan Clark, a former Tory minister in the department, argued that DTI inspectors' reports should be made public. There were also strong indications that the Commons Trade and Industry Select Committee would examine the whole procedure for dealing with such reports.
Mr Hamilton, writing in Mr Heseltine's absence on holiday to Robin Cook, Labour's industry spokesman, said: 'I . . . reject entirely any suggestion that this decision, or indeed the decision to confirm the existence of the investigation, was tainted by partiality.
'It follows that I see no case for inviting any other authority to review the decision already quite properly taken by the Secretary of State.'
Mr Hamilton's response - the first from a minister since disclosures that Lord Archer had personally placed an order for Anglia shares on behalf of Broosk Saib, an Iraqi Kurdish friend - came less than 24 hours after the Tory peer's admission that he made a 'grave error' in associating himself with the share deal when his wife, Mary, was an Anglia director.
Lord Archer, who is on a book- signing tour of Australia, said yesterday that he had nothing to add to that statement, in which he inisted he had had no inside knowledge. Lady Archer also declined to comment as she left the couple's Cambridgeshire home in a chauffeur-driven Daimler.
Mr Cook said that Mr Hamilton's response had 'failed to produce a single legal obstacle' to stop him passing the report to the CPS. He challenged Lord Archer to give pounds 80,000 (the reported profit of the share deal) to 'a suitable charity - perhaps to Kurdish relief work with which both he and Mr Saib have been associated'.
Mr Saib also refused to discuss the case with reporters outside his South-west London flat. Although Mr Hamilton said it would be 'illegal' to publish the inspectors' findings, Mr Clark argued that a new precedent could be set by disclusure in the present case. He added: 'It is very important that the party should be seen to be absolutely clean on all these sort of things.'
The Tory party chairman, Jeremy Hanley, was non-committal about Lord Archer's future role in the party. 'Lord Archer has been a very good friend of the party for many years, and I think I owe it to him to speak to him before I make any comment at all.'