Sir Nicholas Lyell, the Attorney-General, and Barbara Mills, the Director of Public Prosecutions, were both kept informed of the police investigation into the accusations against Nadir.
Nadir was arrested twice, and his sister once, in the course of police inquiries; at least two house raids were mounted on private property; and a High Court judge was told, much to his surprise, that police might interview him in connection with the 'plot'.
Why did the police and the SFO allow this investigation to progress so far? The police have refused to discuss the history of the inquiry and the Serious Fraud Office has excused itself from any responsibility on the grounds that Scotland Yard has control of the investigation.
The Independent disclosed two weeks ago that the two key witnesses on whom the police apparently based this investigation had fled from to Northern Cyprus and are both now claiming that they concocted the whole story.
Their original tale was extraordinary: they alleged that Nadir, former chairman of Polly Peck, who was facing charges of false accounting and theft involving more than pounds 30m, was conspiring to pervert the course of justice by bribing Mr Justice Tucker, the trial judge.
They implicated others: Anthony Scrivener QC, Nadir's defence counsel and a former chairman of the Bar Council, and Wyn Jones, an assistant commissioner at Scotland Yard. It was never clear how Justice Tucker, Mr Scrivener and Mr Jones were supposed to be involved. The two witnesses claimed that Nadir was setting up a pounds 3.5m fund in a Swiss bank which he was going to use to pay his bribes.
The two witnesses now say that not only did they lie (and in so doing they are implicating themselves in a conspiracy to pervert the course of justice which carries long prison sentences), but they also claim that the police told them to lie. The police deny this.
One of the alleged conspirators, Michael Francis, is a confidence trickster with a criminal record stretching back to his teens. The police had knowledge of him - he claims, and unofficially Scotland Yard sources confirm, that he worked as an informer on and off during the 1980s.
The 'evidence' the witnesses produced (which the Independent has examined in detail) is far from conclusive, even to the least sceptical mind. There was an agreement signed in early 1992 which purports to show that Nadir was using his mother and sister to raise funds for his bribery account in Switzerland.
His mother and sister claim, as does the second police witness Wendy Welsher, that this document relates to a legitimate deal connected with the construction of a holiday village. The police, however, cited this as 'evidence'- although there was no other documentary evidence of the plot.
The police took this allegation seriously. In October 1992, the Serious Fraud Office let it be known to the Attorney-General and the Director of Public Prosecutions that the police proposed to interview Mr Justice Tucker in connection with the 'conspiracy'. The announcement threw preparations for Nadir's Polly Peck trial into chaos.
One month later, policemen on attachment to the SFO with colleagues from Scotland Yard raided one of Nadir's homes in London. Nadir and his sister were arrested the following day - and promptly released. Six months later Nadir was arrested again, but he was not charged.
Last July, the Attorney-General wrote to Mr Scrivener admitting that there was no evidence implicating him in any plot. Mr Jones is said to have learnt of his alleged involvement from the television news. It was only on 5 November this year that police filed a final report to the CPS, which promptly rejected it.