Greer claims he raised pounds 750,000 for Tory funds

John Major faces increased pressure to broaden the investigation surrounding the Tory MP Neil Hamilton and political lobbyist Ian Greer, after Mr Greer claimed yesterday to have raised pounds 750,000 for the Conservatives over the past decade. The Prime Minister himself became potentially enmeshed in the row when Mr Greer said he paid to provide a car and offices for John Major's leadership campaign in 1990.

Mr Greer confirmed to the Times newspaper in an interview yesterday that he intended to resign for his company, IGA. Although he will be not be attending this week's Conservative Party Conference in Bournemouth, his latest allegations will be seen as damaging and deeply embarrassing to the Tory Party.

On the BBC's Breakfast with Frost programme Mr Major said the cash for questions row was "poisoning British politics" and said he wanted the matter settled within weeks. However the fresh allegations from Mr Greer yesterday, including the claim that this summer he was approached by government ministers for help in their election expenses, will fuel demands that any investigation must now go beyond the remit of the Parliamentary Commissioner, Sir Gordon Downey. Doubts have already ben raised that Sir Gordon's office does not have sufficient resources to carry out an effective investigation.

Setting up a full tribunal of inquiry, possibly with a judicial head, may now be Mr Major's only way out of criticism that Sir Gordon's role is inadequate given the scale of Mr Greer's new allegations.

Mr Major appeared angry while being interviewed by Sir David. He repeatedly banged his hand on the table refuting any hint of a governmental cover- up. The Prime Minister also insisted that he had only been given a three- minute car journey, a courtesy ride, by Mr Greer from Downing Street to St James's Park.

However, Mr Greer's version is at direct odds with the Prime Minister's description. He said that after Mrs Thatcher's resignation in 1990 he had gone to Mr Major's leadership campaign offices to offer his assistance. He was told that Mr Major needed a car and he claimed his luxury Daimler was used for three or four days. He maintained he personally drove Mr and Mrs Major from Downing Street to St James's Park.

Initially Mr Major's campaign was run from an office in Alan Duncan's Westminster home. The offices were later moved to offices belonging to Mr Greer's company. Mr Greer said he was paid for the offices.

The Hamilton-Greer affair is now threatening to blow open the wider question of how British political parties receive their funding. It is understood that Mr Greer has already been approached by publishers to write an expose of the world of political lobbyists.

The Prime Minister himself gave a hint of the bitterness the cash-for- questions row has already caused when he told Sir David during the interview that Labour had been conducting a witch-hunt. He said he would be surprised if anyone in Westminster did not know Mr Greer. "He paid for Tony Blair to go on Concorde to America. He handed fees, via an intermediary, to Robin Cook, for making speeches on party political matters."