Inglorious end for Lottery regulator

Yesterday afternoon Britain's first lottery regulator was defiant; he was going to carry on with his job. By evening he was gone. Kim Sengupta charts the rise and fall of Peter Davis.

Before Peter Davis went into his long and stormy meeting with the Secretary of State for Culture, Media and Sport, Chris Smith, the Prime Minister's press secretary was asked whether Tony Blair had confidence in Mr Davis as the lottery regulator. Pointedly, he refused to answer. At that point it became clear that there would be a new man in the pounds 84,000-a-year post before the day ended.

The man whose job was to ensure that the lottery was operated by fit and proper persons was described by his critics as not fit and proper to fulfill that role. Mr Smith said: "In order to ensure that public confidence in the lottery is maintained, Mr Davis felt it was right to tender his resignation as director-general." Mr Davis, who had arrived into an ugly media scrum, left grim faced and silent for one of his last visits to the office of the National Lottery.

It was an inglorious end to a career which had managed to embrace controversy without ever rising over mediocrity. More than 30 years ago, Mr Davis came sixth in the country's accountancy exams, and that, one may say, is about as successful as he got. Since then, he has been closely involved with two of Britain's biggest business failures, Harris Queensway and Lloyd's, earning the lucrative if embarrassing sobriquet as the man who was paid twice to go away.

It was, therefore, something of a surprise to many in the City when he was named as the lottery regulator, and there was further disquiet about some of his actions while in the post. Before awarding the contract to Camelot, he accepted five free flights in a private jet from GTech, one of the members of the consortium. The flights were taken against Whitehall advice. Mr Davis apparently saw nothing wrong in taking them. The Commons public accounts committee found him guilty of "serious errors of judgement".

The MPs also criticised Mr Davis's social visit to New York financier Carl Menges, the boss of an investment house with a major stake in GTech. "We regard it as vitally important that the director-general should be seen by the public to be completely impartial and at arm's length from the lottery operator, its shareholders and those with financial interests in them," they said.

The MPs also had doubts about GTech's fitness to be involved in the lottery. Mr Davis said he himself had concerns about its business practices, but then asked the private session of the committee not to make his views public for fear of damaging confidence in the draw. Mr Davis had asked for the hearing to be private. Towards the end Labour MP Alan Williams said: " If what you just said to us had been in open session ... the press would have buried you alive".

Mr Davis claimed he needed confidentiality because he was dealing with information supplied by the Federal Bureau of Investigation, a claim which The Independent reports elsewhere is now open to question.

Mr Davis escaped with his job that time. He also said he was determined to hang on because he had done nothing wrong. He sang the same tune when he arrived for yesterday's meeting, but he had misjudged the mood of the Government. He had also underestimated the disquiet generated by the Richard Branson libel trial. He had to go.