'Grave error' buries Archer's hopes: Through his lawyer, he admits a mistake and says sorry to his wife. The questions, however, refuse to go away

INEVITABLY, the Anglia TV shares saga that looks certain to end the political ambitions of Lord Archer has been likened to his novels. But at Westminster last week, old Archer hands shook their heads. 'No, this isn't one of Jeffrey's novels,' said one. 'The characters are all too believable - it's his story line that isn't'

Lord Archer's statement on Wednesday, made in his absence in Australia by his lawyer, Lord Mishcon, confessed to 'a grave error' in his share-dealing activities and tendered an unusually public apology to his wife, Mary. It also raised as many questions as it answered, and by the end of the week Lord and Lady Archer were as far from clear water as ever.

From reports in the Financial Times and the Sunday Times - so far unrebutted by either Lord Archer or his wife - the timetable of the events earlier this year that caused the Department of Trade and Industry to investigate the shares purchase goes like this:

12 January: as a director of Anglia Television, Lady Archer attends a board meeting which discusses, for the first time as a full board, the bid proposals of MAI, the leisure company headed by Lord Hollick that wants to buy Anglia. MAI is offering 610p a share (which later goes up to 637p) at a time when the Stock Exchange price for Anglia is 482p.

13 January: Lord Archer telephones the London offices of Charles Stanley, a leading stockbroker with whom he had had no previous dealings, and instructs the firm to buy 25,000 shares in Anglia TV. The stockbroker demurs slightly, pointing out that takeover speculation had created a big demand for shares. Lord Archer asks that the shares be credited to the name of Broosk Saib, an Iraqi, aged 32, who is a friend and former employee of Lord Archer.

14 January: Lord Archer instructs Charles Stanley to buy a further 25,000 shares. The total cost of the 50,000 shares is pounds 240,000, but no money changes hands. Under Stock Exchange rules, Lord Archer has two weeks to settle his account.

16 January: Lady Archer attends another Anglia board meeting. It agrees that the company should be taken over by MAI.

18 January: MAI publicly announces its takeover bid. Anglia's share price jumps by 180p. Lord Archer instructs Charles Stanley to sell and thus nets a profit of pounds 80,000 in five days. He also tells the broker to send the cheque to his London address, though it is made out to Mr Saib.

That might have been that: a quick but routine killing on the stock market, Lord Archer does a favour (which last week became 'the grave error') for a friend. But David Howard, managing director of Charles Stanley and a magistrate and alderman of the City of London, was not happy. He thought the share deal had 'all the hallmarks of something suspicious'. His firm notified the Stock Exchange authorities, who run a sophisticated computer system that monitors the 30,000 shares transactions, worth pounds 600m, that take place every day. Even telephone calls are taped by investigators on the lookout for evidence of insider dealing.

INSIDER dealing - the use of privileged information to make a killing - has been a criminal offence since the 1980 Companies Act tried to introduce a new era of City probity. Its aim was to ensure that a new generation of small shareholders would have a 'level playing field' with the shrewd and practised City investor. Proving an offence is, however, notoriously difficult. Share trading can be hidden by dealing through nominee accounts or foreign trusts, and few people, if they wished to act on inside information, would be foolish enough to have telephone conversations about it. Bars, street corners and supper tables are safer.

The latest legislation, which came into effect in March, defines an insider as someone with 'direct access' to inside information. Under the previous laws, effective when Anglia shares were traded, an insider had to be 'connected' to the company, for instance as a director or his immediate family.

There are also rules in the Stock Exchange Yellow Book that govern the conduct of company directors and their families. The rules state the director must tell family members when they cannot deal - during a takeover period, for example, unless the director's 'duty of confidentiality to the company prohibits him from disclosing such periods'.

The issue of whether Lady Archer fulfilled all her obligations under the Yellow Book rules during that critical period is now being examined by the Stock Exchange.

Mr Howard said later that the Anglia transaction 'leapt off the page' and the Stock Exchange authorities agreed with his suspicions. They referred the deal to the Department of Trade and Industry. On 7 July, a report in the Times, confirmed by the DTI, disclosed that Lord Archer was being investigated. Lord Archer insisted the allegation was 'completely untrue' and a week later the DTI announced that its investigation was complete and no further action would be taken. Lord Archer said: 'I am grateful to have been exonerated.' Then, 10 days ago, the Financial Times began the most recent round of disclosure.

The Labour Party has demanded a statement from Michael Heseltine (the DTI minister, still on holiday) and that the case be referred to the Crown Prosecution Service and out of ministerial (and political) jurisdiction. But so far as the Government is concerned, the matter is closed.

THIS MAY be a difficult line to sustain. The case is still the talk of Westminster. The questions refuse to go away. Why did Mr Saib not buy the Anglia shares himself? He describes himself as an interior designer. He has a flat in Putney, expensive suits and a 5-series BMW, and by his own admission knows the share market. 'I have bought a lot of shares in my lifetime,' he said, 'and I will continue to do so.'

However, he did not buy these shares. Nor, technically, did Lord Archer. In fact, nobody actually bought them. They were ordered and sold for a profit under Stock Exchange rules, which then allowed settlement within two weeks. This means that Lord Archer's name would not appear on the Anglia TV share register.

But when Lord Archer ordered the shares - in a transaction that could have cost him pounds 240,000 - why was he so confident of a profit? Did he know something that other investors might not know? Or was he simply a more acute reader of the City share tippers' columns?

Alistair Darling MP, Labour's City spokesman, is certain that the whole truth has not yet emerged. 'There are fundamental questions here that Archer must answer,' he said last week. 'Why was the shares order made that way? On what basis did he decide to buy Anglia shares in such a substantial volume, and have the remittance sent to his address?'

The two-week settlement period also causes concern. 'That raises the presumption that the person placing the order expected that the shares would be sold quickly, and that there would be a profit.' Mr Darling said. 'The question arises: how was that known? That is the key.'

The pressure is not only from the Opposition. Alan Clark, the former trade minister, said the Conservatives were identified in the public mind with finance and big business and 'it is very important that the party should be seen to be absolutely clean on all these sort of things'. He would like the findings of the DTI inspectors made public.

'It could quite properly be a matter for Parliament,' he said. 'You could have an adjournment debate on it and the whole thing is kept in the public domain. What the Conservative Party should try to move away from is being seen to be covert in any way relating to matters that do become high-profile in terms of public interest.'

John Major must be deeply grateful that Parliament is in recess for another seven weeks, minimising Labour's ability to keep the affair going. So far, Downing Street has parried questions with the advice that 'this is a matter for the DTI'. As the experience of David Mellor showed two years ago, Major stands by his friends, sometimes for too long.

The chemistry between the two men is not easy to explain. Both are of modest, if sometimes opaque, origins and both are enthusiasts of cricket and the England of the 1950s. But Lord Archer's easy transfer from Margaret Thatcher ('my Jeffrey') to her successor displays, as even Conservative Central Office sources concede, 'quite a talent'. They ascribe it to Archer's ceaseless contact with party activists, whose views he channels to Number Ten. 'He is not a member of the establishment. He is an ordinary person who can talk to ordinary people.'

What ordinary people - and ordinary Conservatives - will make of this latest episode in Lord Archer's career remains to be seen. Bouncing back is his speciality, but the bounce needed this time may be higher than even Lord Archer, the rubber man of the rubber chicken circuit, can achieve.

(Photograph omitted)