Aitken's house of lies collapses

Ex-minister faces ruin and perjury investigation

Jonathan Aitken, the former Cabinet minister who was once tipped as a future Tory leader, was last night a broken, humiliated man, facing financial ruin and branded a "serial liar".

He will now face a police investigation into whether he committed perjury during his High Court libel action against the Guardian newspaper and Granada Television, which he sensationally dropped yesterday.

Mr Aitken, who resigned from the Cabinet in 1995 to pursue his legal campaign - using, in his words, the "sword of truth" and the "shield of fair play" - now faces costs estimated at up to pounds 2.5m.

He dropped the action after documents came to light indicating that he had lied to the High Court, and to the prime minister, John Major, and the Cabinet Secretary, Sir Robin Butler, over a stay at the Ritz Hotel, Paris, for which he said his wife had paid the bill. The documents indicated that she was not in Paris at the time Mr Aitken said because she was in Geneva with their daughter.

The Guardian last night urged the Director of Public Prosecutions and the police to consider bringing criminal proceedings against Mr Aitken.

The newspaper confirmed that it had written two letters: one to Barbara Mills, the DPP, and the other to Sir Paul Condon, the Metropolitan Police Commissioner. A spokeswoman for the Guardian said the letters explained why its allegations against Mr Aitken of perjury or conspiracy to pervert the course of justice should be investigated. Its moves to contact the DPP and the police came hours after Mr Aitken discontinued his action against the newspaper and Granada Television in the face of last-minute evidence accusing him of lying. The 54-year-old former defence procurement minister and Chief Secretary to the Treasury had sued over allegations that he was financially dependent upon the Saudis, pimped for them, and was involved in secret arms deals.

Mr Aitken had claimed his personal, political and professional reputation had been "butchered" by the newspaper articles and a World in Action broadcast, "Jonathan of Arabia", which appeared in April 1995. Neither Mr Aitken nor his wife, Lolicia, who on Thursday announced the couple's separation, were in court to hear his counsel, Charles Gray QC, announce to Mr Justice Popplewell, during a 60-second hearing that the action was being withdrawn.

A Crown Prosecution Service spokesman said that, once the Guardian had placed its evidence in the hands of Sir Paul Condon, "a police investigation will proceed in the normal way". At the end of the investigation the police would, "in the normal course of events, submit a report if they felt proceedings were justified".

The maximum sentence for perjury is seven years, while the maximum penalty for perversion of the course of justice is life imprisonment and/or a fine.

Alan Rusbridger, editor of the Guardian said: "Jonathan Aitken seems to have impaled himself on the simple sword of truth. For three years he has lied to newspapers, lied to the Cabinet Secretary, lied to the Prime Minister and lied to his colleagues. Now he has made his fatal mistake by lying on oath to the High Court."

Peter Preston, the former Guardian editor, described him as a "serial liar". He said: "The Cabinet Secretary was lied to, the Prime Minister was lied to, the court was lied to. It was one big lie."

Throughout the trial Mr Aitken had been repeatedly accused of lying by George Carman, QC, counsel for the defence, while in the witness box. The ex-minister admitted to being " less than candid" to the Independent Broadcasting Authority over Saudi investment in TV-am, carrying out "sharp editing" in a letter he had written to Sir Robin Butler, and "dissembling" when he hid the Saudi ownership of the Inglewood health hydro in Newbury, Berkshire.

In one exchange, he was asked by Mr Carman: "Wasn't this a rather polite and sophisticated way to say you were not telling the truth?" Mr Aitken replied: "I choose my words sensibly." His business activities were as complex as his understanding of truth and lies. The house he owns in Lord North Street, Westminster, is now worth more than pounds 1.5m, but it is unclear where he got the money to buy the house originally.

His home in Sandwich, Kent, is owned by an off-shore company in Panama. Mr Aitken told the court that it was gift from his wife's grandmother. He owns land in New South Wales, Australia, and until l990 was the chairman of the family run Aitken Hume merchant bank. He also appears to have a number of offshore bank accounts.

Amid all the scathing criticism, Mr Aitken had one voice of support. Alan Clark, the Tory MP, said: "It is a tragedy. I am immensely sympathetic to him. It is going to be a great loss for the Tory party."

Mr Aitken is at present pursuing claims of libel against The Independent and The Independent on Sunday which are being vigorously defended.