A millionaire hedge fund baron who was a key backer of Liam Fox had hosted the new Defence Secretary, Philip Hammond, at a series of lavish fundraising dinners for the Conservative Party.
Mr Hammond, appointed by David Cameron as a "safe pair of hands" to the Ministry of Defence after Mr Fox's resignation, lists Michael Hintze, an Australian-born former Goldman Sachs banker, several times in the MPs' register of interests as a donor – including one for "£1,700 hospitality at Carlton Political Club Dinner" – before and after he became a Cabinet minister.
Mr Hintze, one of the richest men in the UK with an estimated fortune of £550 million, donated more than half the budget for a charity, Atlantic Bridge, set up by Liam Fox.
Yesterday a spokesman for Mr Hammond stressed that the hospitality he had received from Mr Hintze had been properly registered, was above board, and there has been no attempt to hide any aspect of it. The new Defence Secretary is said to like Mr Hintze but does not know him particularly well. Mr Hammond, whose arrival at the MoD has been generally welcomed by the military and civil servants after the recent turbulence, was yesterday at Wootton Bassett for a ceremony in which the Royal prefix was granted to the town in recognition of the part it has played in the repatriation of members of the military killed abroad.
Mr Hintze is the chief executive of the hedge fund CQS. He is thought to be close to a number of senior Conservative figures and is reported to have donated £1.5m to the party since 2005. His associates point say he is a well-known philanthrophist and last year gave £2m to the National Gallery.
Meanwhile, the report into the Adam Werritty affair by the Cabinet Secretary, Sir Gus O'Donnell, will be made public tomorrow, the Foreign Secretary, William Hague, disclosed yesterday.
While Sir Gus's conclusion are likely to be highly critical of the former Defence Secretary's informal arrangement with his best man, and to strengthen calls for lobbyists to be regulated, the report is expected to clear Mr Fox of the accusation that he was using his friend to run a parallel foreign policy, in opposition to the Government's, in Sri Lanka and the Middle East.
"If I asked him [Mr Fox] not to go to Sri Lanka at a particular time, he didn't go. If I asked him when he went to convey the messages of the Government and messages from me to the Sri Lankan government, then he conveyed those messages. So he acted, in my experience, in co-ordination with me and on the instructions of the Foreign Office in foreign policy," Mr Hague told BBC1's Andrew Marr Show.
The Cabinet Secretary's report, commissioned by David Cameron, could be the first of four investigations into the affair. The Parliamentary Commissioner has also been asked to look into whether Dr Fox broke Commons rules by allowing Mr Werritty to live rent-free and possibly run a business from a taxpayer-funded flat, and the Electoral Commission is expected to investigate whether Dr Fox was receiving political donations which should have been declared by law.
Atlantic Bridge, established by Mr Fox and run from his Commons office, became a conduit for the right wing in the UK and US. Mr Werritty, the executive director from 2007, was paid about £93,000 in the period between 2007-10. Accounts show that 58 per cent of the organisation's income, £ 104,000, came from the Hintze Family Foundation. A company, Security Futures, which contributed £15,000 to Atlantic Bridge, had as one of its directors Oliver Hylton, a senior aide to Mr Hintze.
Amanda Bowman, chief executive of the American arm of Atlantic Bridge, said: "I have never met Liam Fox without Adam Werritty there. He was the British operation. But the British arm didn't really do anything. Its money came from one donor, Michael Hintze."
Profile: Michael Hintze
Michael Hintze's passion for the free market is said to date back to his parents fleeing to Australia as refugees in 1953 after losing everything in their flight from Mao Zedong. He joined the Australian army before pursuing a career as a bond trader on Wall Street and London. The 58-year-old's love for the Tory party began with Margaret Thatcher. His devotion to the cause has seen him donate £1.4m of his £550m personal fortune to it. He nurtures a wide range of philanthropic interests through the Hintze Family Charitable Foundation.