Politics: Reprise for sleaze as Hamilton finally comes face to face in court with Fayed

AS NEIL HAMILTON raised a glass of champagne at the 50th birthday party of his wife, Christine, earlier this week, the couple were also celebrating what they believed would be the imminent salvation of the disgraced former MP's reputation.

Mr Hamilton, whose name became synonymous with Tory sleaze amid colourful tales ofcash in brown envelopes and free lavish holidays at the Paris Ritz Hotel, will begin his long- awaited libel action against Mohamed Al Fayed on Monday.

In what is expected to be a bitter and highly charged case the millionaire owner of Harrods will repeat his allegation that he gave Mr Hamilton more than pounds 25,000 in cash in brown envelopes in return for the MP asking questions in the House of Commons on his behalf. Mr Fayed's account of events was accepted by the Parliamentary Commissioner, Sir Gordon Downey, who concluded in 1997 the evidence was compelling that Mr Hamilton, the former minister for corporate affairs, had taken bribes. But Mr Ham-ilton believes that the veracity of Mr Fayed can be successfully challenged in the witness box.

For William Hague and the Conservatives, however, it will be an unwelcome reprise of the "sleaze" allegations that undid John Major's "Back To Basics" campaign and playeda significant part in the Tories' election defeat in 1997.

The libel trial, expected to last three weeks, will, both sides say, delve in detail into the "culture of corruption" that was perceived to permeate the Tories at the time. Allegations of lobbyists offering ready access to ministers and MPs for sale will be resurrected as well as, it is claimed, new allegations presented.

Mr Fayed's lawyers may call the former deputy prime minister Michael Heseltine who, as Mr Hamilton's ministerial superior, asked him whether he had taken money from the lobbyist Ian Greer, who was acting on Mr Fayed's behalf. Mr Ham-ilton denied this, only to say later that the call to Mr Heseltine had been "fraught" and he had been misunderstood.

Also due to appear are a number of journalists including the former Guardian editor Peter Preston on behalf of Mr Fayed. The Guardian first published the allegations against Mr Hamilton in October 1994. The newspaper's internal documents - including memos and reporters' notes - will be used by the former MP's lawyers to try to disprove the allegations.

Mr Hamilton has fought a series of legal battles in his quest to bring Mr Fayed to court. Lawyers for the Harrods owner had unsuccessfully argued that a libel action would challenge the authority of Parliament. Mr Hamilton's legal costs, which are expected to be about pounds 750,000, are being met by a fund set up by a number of right-wing sympathisers, al-though the former MP claims he does not know who are the donors. Two of the country's most expensive barristers have been hired: George Carman QC for Mr Fayed and Desmond Browne QC for Mr Hamilton.

On the eve of the trial both sides are in a combative mood. A close friend of Mr Hamilton said: "The Downey Committee chose to believe Fayed and the witnesses he produced. Now they will face proper cross-examination under oath. One can begin with Fayed by asking just two simple questions: `What is your real name?' and `When exactly were you born?' One can then go on to ask him about his theories about the death of Princess Diana. Neil's lawyers will attempt to prove that this man is not a credible witness."

Sources close to Mr Fayed said he has absolutely no fear of the legal action. One said: "Mr Fayed will speak the truth as he has always done on these matters. All this has already been dealt with by the Downey Committee. However, he is now prepared to go through it again."