Instead of calming Tory nerves, the Prime Minister's Commons statement raised more questions among MPs: Why did Mr Major not sack Mr Hamilton last week? What were the new allegations against Mr Hamilton? What other allegations would be made by Mohamed al-Fayed?
But there was corrosive anger among Mr Hamilton's right-wing friends, who were furious that Mr Major had sacked him after supporting him last week.
'The vacillation of this Government is now so great, we don't know who is going to be thrown overboard next,' a Thatcherite Tory backbencher said.
A senior Cabinet minister on the left of the party was accused by right-wingers of being behind a conspiracy to bring Mr Hamilton down. It was claimed that at a meeting with the chief whip, Richard Ryder, and Michael Heseltine, President of the Board of Trade, Mr Hamilton was confronted with a list of allegations, including interests in an oil company, which he had declared.
'They were out to get him. He just ticked off the list, but they came at him with wild allegations,' one of his friends said.
And at a dinner of the Thatcherite 92 group last night, Tory right-wing MPs were still angry over the Government's handling of the affair.
The setting up of the Nolan inquiry into the standards of public life won more support, although MPs expressed fears that they would be judged in the same way as Caesar's wife, who was required to be above suspicion.
MPs on all sides believed the inquiry could lead to MPs being given a higher salary in return for ending their other outside earnings.
'I do not want 651 full-time MPs all thinking they have to pass more legislation. We have too many people coming into the House with too little experience of the outside world, and of business,' Sir Rhodes, the MP for Brent North, said.
A right-winger said: 'We'll become overpaid, under-employed full-time MPs.
That's the way it's going.' But another Tory MP said: 'I am looking forward to a 50 per cent pay rise by the next general election. I think if we got around pounds 57,000 a year, we could live on that.'
Tory MPs said the Prime Minister had been 'shrewd' to include local government in Lord Nolan's inquiry remit, because that would enable it to investigate alleged Labour sleaze in local authorities, such as Lambeth.
But Labour MPs said Mr Major had failed to escape the mud being thrown about the House.
Stuart Bell, the Labour Shadow Cabinet minister whose allegations in the Commons last Thursday night sparked the resignations, said: 'The sleaze of the 1980s will continue to engulf John Major. There are many more examples which may yet come out. He will never be able to clean up what happened in the Thatcher years.'
Ann Clwyd, Labour MP for Cynon Valley, said: 'John Major has dragged his feet. He was only prepared to act when he was forced to do so by revelation being heaped upon revelation.'
Trade unions and professional bodies welcomed the commission last night, although some expressed doubts about its independence and terms of reference.
The First Division Association, which represents 10,700 senior Whitehall civil servants, said its establishment was 'a long overdue decision'.
But Elizabeth Symons, the general secretary, said that the FDA 'much regrets that the terms of reference fall short of examining some issues of public concern'. The union believed that these should include payments to MPs and political parties and the political affiliations of the chairmen of quangos.
The British Medical Association has spoken out continually against the lack of accountability in the reformed National Health Service and wants the commission to examine this issue. A BMA spokesman said: 'It is not just the lack of accountability in how decisions are made and how the money is spent, but that there is no public justification for these decisions and no personal accountability of the members of trusts themselves.
'There has to be some level of public involvement. Take rationing in the NHS. There must be the opportunity for full public debate on where the finite resources are spent.'
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