John Profumo, Secretary of State for War, had been forced to resign after it emerged that he had slept with a woman who was also having an affair with a Soviet diplomat.
On 12 July 1964, the Sunday Mirror published a front page lead story under the headline: "Peer and a gangster: Yard probe." The newspaper claimed police were investigating an alleged homosexual relationship between a "prominent peer and a leading thug inthe London underworld", who is alleged to be involved in a West End protection racket.
It said the peer was a "household name", and that the inquiries embraced Mayfair parties attended by the peer and the thug, and "the private weekend activities of the peer and a number of prominent public men during visits to Brighton". Scotland Yard wasalso looking at "relationships between the East End gangsters and a number of clergymen". It also spoke of allegations of blackmail.
Although the peer was not named, Fleet Street and the Commons had heard the rumours, and identified the peer as Lord Boothby, a former Conservative private secretary to Churchill, and then a radio and television personality. The Kray's had not yet achieved their notoriety.
Other newspapers did little about the story, and Scotland Yard denied it, but the Home Office and the Prime Minister's office were taking it seriously. The Profumo scandal had similarly simmered beneath the surface for months before exploding.
Sir Tim Bligh, the Prime Minister's private secretary, illustrated how the rumour mill had begun to operate when he sent a note to Douglas-Home on July 18 saying he had spoken to the chief whip, who had heard from two backbench Tory MPs that "Lord Boothby and (Tom) Driberg, (a Labour MP) had been importuning males at a dog track and were involved with gangs of thugs who dispose of their money at the tracks".
Bligh, apparently believing the tales, said the information "has been passed on to the Home Office", and that "the chief whip's (Martin Redmayne) view remains that if a prosecution was impending and was being held up, it should proceed".
The next day the Sunday Mirror splashed again on the story, saying it had a picture of the peer and the gangster sitting on a sofa.
At Chequers that day the story and its implications were debated by the Lord Chancellor, Lord Dilhorne, the Home Secretary, Henry Brooke, and the Prime Minister.
Later another backbench MP told Brooke's personal private secretary he knew the photograph of Boothby and Kray was incriminating, although he had not seen it.
Boothby had by now returned from holiday abroad with Sir Colin Coote, editor of the Daily Telegraph, and sent a detailed letter to the Home Secretary explaining his innocence. The photograph had been taken when Ronald Kray had come to his house six months earlier to discuss a legitimate business proposition. Boothby had not known Kray was a criminal, and had in any case turned down the business plan. Kray had wanted to be pictured with Boothby because he was a personality, and it would have been churlish to refuse. Boothby was not a homosexual, he told Brooke.
On 21 July the Home Secretary chaired a secret meeting of senior Conservatives to discuss what is now being seen as an impending crisis. At his request, the editor and reporter at the Sunday Mirror were interviewed but said nothing.
At this stage MI5 was asked what it knew, and said it had nothing on Boothby or Kray. The chief whip said he believed there was a conspiracy between the Labour Party and the Mirror.
Given a note about the meeting, the unworldly Douglas-Home, out of touch with the subtleties of London gossip, scribbled a note puzzling that if it is politically motivated, why is Boothby involved?
William Deedes, future editor of the Daily Telegraph and then a minister without portfolio, tried without success to find out from Fleet Street the source of the Mirror's story.
Bligh, the Prime Minister's private secretary, by now had the story completely out of proportion, and had picked up the fact that Coote had been peripherally involved with characters in the Profumo scandal.
Then almost as suddenly as it had blown up, the story went away. The Mirror later conceded it had no justification, apologised and paid the peer £40,000 in out of court damages, a massive sum 30 years ago.
Boothby, although always in precarious financial state, partly because of his gambling, gave the money away, mainly to members of his family and children of his friends for their education.