Foxley is freed but holds on to the cash

A former civil servant jailed for the biggest single fraud by a Whitehall official when he accepted pounds 1.3m in bribes has been freed despite refusing to obey a judges' order to repay most of the money.

The Labour Party has reacted furiously to the release of Gordon Foxley, a former Ministry of Defence official who was sentenced to four years in prison in May 1994 for accepting bribes from overseas munitions manufacturers in return for orders. Passing sentence, Judge Brooks ordered that Mr Foxley should be sentenced to an extra three years if he failed to repay pounds 1.5m within 18 months of going to prison, a figure based on the assumption that the real size of the bribes he accepted was much higher than that given in court.

Jack Straw, Labour's home affairs spokesman, who complained at the time about the leniency of Mr Foxley's sentence, has now written to Sir Nicholas Lyell, the Attorney-General, protesting at his swift release.

The Crown Prosecution Service confirmed yesterday that Mr Foxley had been asked to pay the money and had refused. "We did ask him and he has not paid it," a CPS spokeswoman said. The Parole Board had decided to release Mr Foxley, she said.

Mr Foxley, 71, the worst ever example of a civil servant taking bribes, is now back at his luxury home in Henley-on-Thames, Oxfordshire, while the CPS applies to the courts for a receiver to be appointed to seize his assets. A court hearing is scheduled for the end of July.

Any court order, though, is likely to be confined to his cash and property in this country. Mr Foxley has previously been accused by the MoD police who investigated him, of having squirreled away his bribes cash in secret bank accounts in Switzerland. The MoD police have repeatedly complained of being frustrated by the Swiss authorities in their efforts to penetrate the accounts.

The full extent of his activities may never be known. As a civil servant his salary was pounds 25,000 a year but police found evidence of at least pounds 3.8m passing through his bank accounts.

The anger of Mr Straw, who demanded an explanation from Sir Nicholas, is heightened by the fact that he is MP for Blackburn. Trade unions at the Royal Ordnance armaments factory in the town claimed that Foxley's corruption had cost the town hundreds of jobs.

Government embarrassment over his release was heightened by the publication of a full confession and apology from Raufoss, one of the firms that paid him backhanders. The statement from Raufoss in Norway, said that he had received "commission" through a Swiss company. The payments covered the period when he was still working as the chief of MoD ammunition procurement.

"Raufoss declares unequivocally that it should not have made commission payments on MoD contracts," the statement said. The company apologised unreservedly to the MoD, said that it deeply regretted the embarrassment caused and has agreed to compenstae the Government.

Since the case, the three firms concerned have been blacklisted from receiving new MoD orders.

In a Parliamentary answer yesterday, James Arbuthnot, Defence minister, said that following the agreement with Raufoss, normal commercial relations would be restored. Negotiations with the other two companies, Mr Arbuthnot added, were still continuing.

The minister's answer infuriated Labour, for whom David Clark, Labour's defence spokesman, said: "The company's statement is but cold comfort for the thousands of defence workers made redundant in the wake of this massive fraud."