Today's papers

SIR Peter Harding, Chief of the Defence Staff, has had an affair with the Spanish wife of the former Tory Navy minister Sir Antony Buck, the News of the World reports.

Sir Peter, 60, a trusted aide of the Queen and John Major, is reported to have used a chauffer-driven government limousine for secret meetings with Bienvenida Perez-Blanco. The paper quotes extracts from letters he wrote to Ms Perez-Blanco.

Sir Antony, 65, who retired from the House of Commons at the last general election, married Ms Perez- Blanco, some 30 years his junior, in 1990. The marriage broke up last September.

He said last night: 'I would have wished that this affair remain a private matter. But my ex-wife is a very temperamental lady.

'I acknowledge that because of his position, Sir Peter is now in a very difficult and possibly dangerous situation. This, of course, could make a big difference to his career. I am sad that it has all come out, sad for Sir Peter, sad for Bienvenida and sad for me.'

The Sunday Telegraph reports that the most famous picture of the Loch Ness monster shows a toy submarine bought for a few shillings in London. The toy was fitted with a 'classic sea serpent head and neck' made from plastic wood. Five men, now all dead, were involved in the hoax. The finished 'monster', a foot high and about 18 inches long, was photographed floating in Loch Ness for a picture sold to the Daily Mail as a world exclusive in 1934, the Sunday Telegraph adds.

Senior members of Malaysia's ruling party made huge profits, thanks to the British taxpayer, from a multi-million pound privatisation of the electricity company that owns the Pergau dam, reports the Sunday Times. The pounds 234m aid promised by Britain for the project was crucial in underwriting the company's profitability and boosting its share price. The National Audit Office is investigating.

(Photograph omitted)