Standards Commissioner plans Liam Fox inquiry

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David Cameron's hopes of drawing a line under the scandal surrounding Liam Fox were dealt a blow today as Westminster's sleaze watchdog announced he will conduct a fresh probe into the former defence secretary's links with close friend Adam Werritty.

Standards Commissioner John Lyon will look into a complaint from Labour MP John Mann that Mr Werritty was allowed to live in a flat funded from Dr Fox's parliamentary allowances and to run the Atlantic Bridge charity from the MP's Commons office.

The announcement of Mr Lyon's inquiry came just hours after Mr Cameron attempted to brush off questions from Ed Miliband about the affair by telling the Labour leader he was jumping on a bandwagon that had already stopped.

Responding to Mr Lyon's announcement, Dr Fox said: "I will fully answer all questions raised in the complaint made against me in accordance with the inquiry set up by the Parliamentary Standards Commissioner.

"I will work with the office of the commissioner to ensure that this is done as soon as possible."

Dr Fox apologised to the Commons for allowing the distinction between his ministerial responsibilities and his personal friendship with Mr Werritty to become "blurred".

In a personal statement, he accepted the conclusion of the report by Cabinet Secretary Sir Gus O'Donnell that he had breached the ministerial code of conduct and recognised he should have listened to civil servants' warnings about the nature of his association with his friend.

He acknowledged it was a "mistake" to attend a meeting with Mr Werritty and a potential supplier without an official being present.

And he told MPs: "I would like to say again that I am very sorry to all my colleagues here in the House and to all those who feel let down by the decisions that I have made...

"The ministerial code had been found to be breached and for this I am sorry. I accept that it is not only the substance but perception that matters and that is why I chose to resign. I accept the consequences for me without bitterness or rancour."

Cabinet ministers Theresa May and Eric Pickles were on the Government frontbenches to hear Dr Fox's five-minute statement, and Mr Cameron's parliamentary aide Desmond Swayne gave him a hug, in what some observers interpreted as a signal that he was not being cut off by the PM.

Mr Cameron's official spokesman declined to comment on whether Dr Fox might ever return to the Cabinet, and joked when asked about Mr Swayne's supportive gesture: "I don't know in what capacity he was acting when he administered the bear-hug."

Earlier, the PM was challenged by Mr Miliband to give a "categorical guarantee" that no other ministers were relying on unofficial advisers.

The Labour leader said the facts revealed in Sir Gus's report were "deeply worrying", but failed to tell the full story about Dr Fox's links with Mr Werritty, who met him a total of 40 times at the MoD's Whitehall HQ or on trips abroad.

"The truth is we still don't know the full facts about this case, about the money trail, about who exactly in the Government met Mr Werritty," Mr Miliband told the PM.

"And it is becoming clear that there are a network of individuals who funded Mr Werritty, some with close links to the Conservative Party and other members of the Cabinet.

"Given that you said you knew nothing about the arrangements, can you give a categorical guarantee that over the last 18 months no other Government minister has been engaging in similar activities?"

But Mr Cameron told him: "You seem to have failed to have noticed that the minister in question has resigned. You're just a bit late."

In his personal statement, Dr Fox pledged to continue to support the Government and paid tribute to the support of his wife Jesme, who watched him from the public gallery of the Commons.

He said his resignation was "a deep personal disappointment", but insisted he accepted the consequences of his actions "without bitterness or rancour".

But he launched a stinging attack on some members of the media for running a campaign marked by "personal vindictiveness, even hatred", claiming that his relatives and friends had been "hounded and intimidated" by reporters in an unacceptable fashion.

Dr Fox also claimed the media should not "unquestioningly" take the word of businessman Harvey Boulter about their meeting in a Dubai hotel in June.

But Labour defence spokesman Kevan Jones said: "Liam Fox is not a media victim. Investigative journalism revealed the facts he chose to omit from his public statements."

Mr Jones issued a list of 15 questions which Labour believes remain unanswered.

"We still do not know the full facts surrounding the money trail which forced Dr Fox to resign," he said. "We do not know the true role and motives of Adam Werritty. We do not know which Cabinet ministers knew what and when. It is inconceivable that more is not known, given the donors who funded Adam Werritty also fund the Conservative Party.

"Furthermore, it is impossible to give this Government a clean bill of health when David Cameron fails to rule out similar behaviour taking place elsewhere."

Mr Mann said that the Commissioner's investigation was "inevitable and appropriate" as there were still "a number of important questions that need answering".

Leader of the Commons Sir George Young told MPs that new guidance has already been sent to the civil servants at the head of all Whitehall departments to prevent a repeat of the Werritty affair.

Sir George appeared to lay some of the blame for the furore on MoD permanent secretary Ursula Brennan, who raised her concerns with Dr Fox but did not inform Sir Gus when he failed to regularise his links with Werritty.

"It should have been escalated to the Cabinet Secretary who would then have notified the Prime Minister," said Sir George. "Had that happened in this case, this probably would have been addressed at a much earlier stage."