Fayed made his allegations to the Guardian newspaper. Smith resigned his ministerial post immediately, admitting that he had accepted payments from Fayed himself, but not from Greer as The Guardian had alleged. The Guardian was then sued for libel by both Hamilton and Greer.
Prime Minister John Major was prompted to set up the Nolan Committee, which later became known as the Committee on Standards in Public Life. In the summer of 1995, the Conservative–dominated Members' Interest Committee concluded that Mr Hamilton was "imprudent" not to have registered a lavish stay at the Paris Ritz (owned by Fayed); but no further action was taken.
Two days before the libel action was due in court, three of Fayed's employees claimed that they had processed cash payments to the two MPs. Hamilton and Greer denied these new allegations, but withdrew their libel action. This provoked an avalanche of condemnation in the press, led by The Guardian. Parliament initiated an official inquiry into the affair, to be led by Sir Gordon Downey.
Downey began his inquiry in early 1997, but Major called a general election before the report was published. Tim Smith did not stand for re–election. Hamilton was opposed in his Tatton constituency by former BBC reporter Martin Bell, who stood as an independent candidate on an "anti–corruption" platform. Neither Labour nor the Liberal Democrats contested the seat, and Bell defeated Hamilton easily. Tony Blair's 'New Labour' won a landslide victory in the nation as a whole.
Downey's report cleared Greer, Hamilton and Smith of The Guardian's original allegations. Downey did not accept the three Fayed employees' claims to have processed cash payments to Greer, but he decreed that their testimony amounted to "compelling evidence".
Downey resigned in 1998, shortly after the publication of Jonathan Boyd Hunt's book Trial by Conspiracy, which claimed that Hamilton was innocent and that Fayed lied out of spite. Boyd Hunt, an investigative journalist who had worked for Granada TV, claimed that Fayed held a grudge against Hamilton because he had refused (presumably in his role as Parliamentary Under–Secretary of State for Corporate Affairs) to help him acquire a British passport.
Despite the fact that Downey apparently cleared Tim Smith along with Neil Hamilton and Ian Greer, it's hard not to conclude that Fayed was paying Smith to table questions – because Smith admitted as much himself. This would have given Fayed a ready–made scandal to expose, and it would be all too easy for him to claim that Hamilton was involved. Smith was just collateral damage – although it's hard to feel sorry for him, guilty as he was by his own admission.
Quite what Ian Greer's actual (as opposed to alleged) part in the affair might have been, I have been unable to establish. I can only guess that he may have been acting as a go–between in Fayed's quest for a passport, which might have made him a second target for Fayed's wrath.
© Haydn Thompson 2017