Battle of the tycoons that led to saga of disgrace grace

It started in Mohamed al Fayed's sumptuous office in Harrods and by last night was stalling the start of the Conservative offensive in the election campaign.

The battle between Mr Fayed and Lonrho's Tiny Rowland for the Knightsbridge store led to lobbyist Ian Greer dispensing money to some 40 MPs and candidates, mainly Tory, as Mr Fayed sought political support in the Commons.

Flush with Mr Fayed's cash, Mr Greer paid for questions to be asked in Parliament, and meetings to be arranged with ministers.

Sir Michael Grylls, the Tory MP with whom he had a longstanding relationship, received at least pounds 86,000 in payments from Mr Greer. Other Tory MPs who received cash include Neil Hamilton, who now admits having received pounds 10,000 from Mr Greer without declaring it; Tim Smith, MP for Beaconsfield, who resigned as Northern Ireland minister when it emerged he had accepted cash to ask questions for Mr Fayed (sum later estimated at between pounds 18,000 and pounds 25,000); Sir Andrew Bowden, MP for Brighton Kemptown who admits that he received election expenses of pounds 5,319 which were not declared on his election return or with the register of members' interests; and Michael Brown, MP for Cleethorpes, who admits receiving pounds 6,000 from Mr Greer to lobby for a manufacturer of tobacco chewing gum and not declaring it on the register.

Five other Tories are still under investigation by Sir Gordon Downey but Sir Gordon has stressed that this does not imply that there is any substance to the allegations against them. They are: Sir Peter Hordern, who is standing down, Lady Olga Maitland, Norman Lamont, Gerry Malone and Nirj Deva.

Mr Fayed also wanted to be a British citizen, but was being blocked. He couldn't understand why all the money he had paid out had not reaped any benefits. Back home in Egypt, he would have got anything done for that kind of money. Eventually, he began to tell his tales to journalists.

In September 1994, he summoned Brian Hitchen, editor of the Sunday Express to his office and told him the tales of cash for questions and other allegations against MPs. He specifically named Neil Hamilton and Tim Smith.

Mr Hitchen alerted John Major to the allegations, and the Prime Minister set up an inquiry headed by Sir Robin Butler, the Cabinet Secretary. While many of Mr Fayed's allegations may have proved unfounded, his scattergun approach hit a few targets and led to the libel case which was to expose the murky relationship between MPs and lobbyists to the public gaze.

Five days before Sir Robin Butler's inquiry was published, towards the end of October, the Guardian ran a story about cash for questions involving Mr Smith and Mr Hamilton. Mr Smith held up his hands and went quickly, but Mr Hamilton demurred, and only eventually resigned because, according to Mr Major, there were other allegations to be investigated.

Mr Hamilton and Mr Greer launched a libel campaign against the Guardian that was to prove their undoing. Days before it was due to reach court in October 1996, first Mr Greer, then Mr Hamilton pulled out.

The focus turned to Sir Gordon Downey, the Parliamentary Commissioner for Standards, whose post had been created as a result of the Nolan Committee, itself set up as a result of Mr Fayed's allegations. Sir Gordon began an inquiry which he was to have presented to the Standards and Privileges Committee, another Nolan innovation.

Sir Gordon amassed another set of documents and was expecting to present his findings to the committee next Tuesday. But the unexplained 19-day gap between the prorogation (the suspension of activity) and the dissolution of Parliament on 8 April meant that the committee had no chance to deliberate on it before the election.

As a result of that, the documents were leaked yesterday - sparking off another round in the saga that started because Mr Fayed got the better of Mr Rowland in the Harrods takeover battle.

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