The curious incident of the forgotten exchanges

When Michael Howard went on the attack over the chaos in the Immigration Service at Prime Minister's Questions on Wednesday, MPs were puzzled that Tony Blair did not defend his Home Secretary, David Blunkett, and the Immigration minister, Beverley Hughes.

When Michael Howard went on the attack over the chaos in the Immigration Service at Prime Minister's Questions on Wednesday, MPs were puzzled that Tony Blair did not defend his Home Secretary, David Blunkett, and the Immigration minister, Beverley Hughes.

Yesterday, the mystery was explained. As he prepared for his weekly joust with the Tory leader, officials brought Mr Blair some bad news. A trawl of documents at the Home Office had uncovered a bombshell: Ms Hughes had been warned more than a year ago that there was "abuse" of the system under which people in Romania and Bulgaria can apply for work visas in Britain. To make matters worse, the warning had not come from a disgruntled civil servant but from Bob Ainsworth, a fellow Home Office minister, who had just returned from a visit to the two countries.

Mr Blair was already scheduled to meet Ms Hughes and Mr Blunkett a few hours later for a discussion on asylum and immigration. She told the meeting she should resign because her exchange of letters with Mr Ainsworth would look at odds with what she had said in three media interviews on Monday. She was scrambled to the television studios after the Tories produced an e-mail from James Cameron, the British consul in Bucharest, claiming that the Government was allowing people from Romania and Bulgaria to enter Britain with forged documents.

Ms Hughes criticised David Davis, the shadow Home Secretary, for not disclosing the e-mail sooner after it was sent to him anonymously on 8 March. But in doing so, she dug her political grave. On Channel 4 News, she denied that she knew anything about bogus applications in Bucharest or Sofia. Describing the allegations as "completely new", she said: "We haven't had the allegations put to us before today." She told Sky News and BBC Newsnight that this was the first time that anybody except David Davis had heard of the allegations.

According to Downing Street, Ms Hughes "did not recollect" that in March last year, Mr Ainsworth had written to her expressing his concern about strikingly similar allegations to Mr Cameron.

If Ms Hughes had forgotten, Mr Ainsworth had not. After her interviews, he took her aside in the House of Commons for a talk.In public, Ms Hughes was putting on a brave face. When the Tories staged a Commons debate on immigration on Tuesday, she declared: "I am neither incompetent nor dishonest and I intend carrying on doing my job as long as the Prime Minister and the Home Secretary want to me to do so."

Mr Blunkett reiterated his support for her. The previous day he had said: "The message to the right-wing press is look somewhere else because you're not getting a scalp from a minister in my department."

A Blair aide said the Government would be able to turn the heat on Mr Howard over his record as Home Secretary, when there were similar fast-track schemes to clear a backlog of immigration cases.

Afterwards, Mr Davis produced the e-mail from the consul in Bucharest. The suspicion among ministers was that he did so to deflect an attack on Mr Howard's record. But the Tories insist the e-mail was sent anonymously and they needed to check it. They only knew Mr Cameron was the author after he was suspended last week.

Tuesday was Ms Hughes's 54th birthday. But despite her defiance in the Commons, it was not to be a happy one. By the time she had dinner with Mr Blunkett on Tuesday night, the news from her officials was grim: Mr Ainsworth was right.

It was not until Wednesday that the relevant Home Office papers were put together. Westminster was unaware of the looming crisis. Its eyes were focused on another backbench Labour rebellion over university top-up fees, which Mr Ainsworth and his fellow whips were fighting to contain.

Time was running out for Ms Hughes. She told Mr Blair that the allegations by Mr Cameron were more serious than those passed to her by Mr Ainsworth because they involved fraud and forged documents. But she believed the public would not regard them as different. In theory, she could hang on and await the verdict of the second inquiry into the immigration crisis by Ken Sutton, a senior director of the Immigration and National Department. But she felt it was better to go quickly.

At their meeting, the Prime Minister told her to sleep on it. But they both knew the die was cast, and when she met Mr Blair at 8.15am yesterday, he accepted her resignation. The Tories and the media had got their scalp after all.