Fox 'misled backers over donations'

Liam Fox was facing more pressure today over his involvement in soliciting donations for a company that funded close friend Adam Werrity.

Prominent Tory backers were said to have complained that the former defence secretary "misled" them about how the money would be used.

Labour MP John Mann also insisted police and the Electoral Commission should look at whether Dr Fox and Mr Werrity had behaved in a criminal fashion.

The latest wave of developments came despite Dr Fox finally falling on his sword on Friday night after a turbulent week for the coalition.

David Cameron shifted Philip Hammond to take charge at the Ministry of Defence, while Justine Greening replaced him at Transport.

According to the Sunday Telegraph, the reshuffle was so hastily conducted that Mr Cameron contacted his ministers from a train platform surrounded by morris dancers.

Venture capitalist Jon Moulton is understood to have approached Cabinet Secretary Sir Gus O'Donnell to express unhappiness about Dr Fox's actions.

Mr Moulton said the Cabinet minister asked him to donate to Pargav, a not-for-profit company set up by Mr Werritty. He was apparently told the firm helped provide "security and analysis", and was unaware it was funding Mr Werritty's travel to meet Dr Fox on official trips.

The millionaire has also complained to the Conservative Party about the way he was treated.

There were reports that those giving money to Pargav had been promised anonymity, which could potentially be against tough rules on declaring donations.

Bassetlaw MP Mr Mann said he had written to police asking for a fraud investigation to be launched.

"I referred the matter to the police to investigate whether there is a potential fraud," he told the Telegraph.

"Mr Werritty gave out business cards saying he was an adviser to Dr Fox.

"If that is not the case and he was getting money - for whatever purpose - by misrepresenting his relationship with the defence secretary, that cannot be right."

Dr Fox's actions should also be scrutinised by the force, he added.

A City of London Police spokesman said: "City of London Police can confirm is has received an allegation of fraud.

"Officers from the force's economic crime directorate will consider the matter and establish whether or not it is appropriate to launch an investigation."

Sir Gus is still due to complete his probe into Dr Fox's links with Mr Werritty - who appeared to be effectively acting as an aide even though he had no official role at the MoD or with the Tory party.

He is expected to be highly critical of the arrangement when the results are published.

Earlier this week, an interim report by MoD Permanent Secretary Ursula Brennan disclosed that Mr Werritty had met Dr Fox 22 times at the department and joined him on 18 overseas trips since he came to office last year.

They included talks with the Israeli ambassador, a dinner with the new US commander of international forces in Afghanistan, and a meeting with a defence supplier in Dubai at which no officials were present.

The disclosures led to questions over how he was given such high-level access, even though he had no security clearance.

Meanwhile, the Mail on Sunday claimed to have identified the "younger man" who was staying with Dr Fox when his home was burgled in April last year.

Tory bosses have admitted they wrongly told journalists that Dr Fox was alone in the central London property because his wife was abroad.

The newspaper said Lieutenant Colonel Graham Livesey had been sleeping in the guest room after the two men went out for drinks.

Foreign Secretary William Hague said Sir Gus's report would be completed "over the coming days".

He dismissed as "fanciful" the idea that Mr Werritty could have been running a shadow foreign policy outside the control of government.

"One adviser or non-adviser, whatever he may have been, is not able to run a totally different policy from the rest of government," Mr Hague told the BBC's Andrew Marr show.

The Cabinet minister stressed that he would wait for Sir Gus's report before drawing conclusions, but added: "It is wrong to purport to do things on the part of the Government if it is not on behalf of the Government."

Mr Hague said he had not met Mr Werritty since becoming Foreign Secretary, and "only in passing when I was shadow".

"I think you will find that contacts with other ministers apart from (Dr) Fox with Mr Werritty would be very slight," he added.

Mr Hague said he had only been a "name on the letterhead" for the Atlantic Bridge think-tank set up by Dr Fox. "It doesn't mean that you know how the thing is being run in detail," he insisted.

He indicated that the coalition would look at reforming the lobbying system in the wake of the scandal that engulfed Dr Fox.

International Development Secretary Andrew Mitchell claimed the Government was more open and transparent than its predecessors.

But he said: "I'm quite sure the Prime Minister and Cabinet Secretary will be looking to see if there are any lessons which need to be learned as a result of what has happened."

Mr Mitchell told Sky News's Murnaghan programme David Cameron was committed to "cleaning up politics", adding: "We make a virtue of openness."

Source: PA