'Blackmail' denied by Fayed as Major refers case to DPP

Mohamed al-Fayed last night rejected allegations that he had attempted to 'blackmail' the Prime Minister by threatening disclosures about the conduct of ministers.

There were few clues last night to the identity of a mysterious intermediary who approached John Major a month ago on the Fayeds' behalf threatening to disclose information about malpractice by ministers.

Mr Major has passed notes of the meeting with the intermediary to the Director of Public Prosecutions.

The move caps an extraordinary week in which allegations emanating from Mr Fayed, the owner of Harrods, have shaken the Government, forced two ministerial resignations and led the prime minister to set up a permanent watchdog of standards in public life.

Mr Major has said he had refused to consider any 'deal' with the intermediary, who must have been a senior figure with political influence to win an audience at Number 10.

However, Mr Fayed insisted he had no knowledge of anyone making representations on his behalf. He said that many politicians and journalists were aware of the allegations, and may have made an unauthorised approach on his behalf.

He said Ian Greer, a lobbyist who employed Neil Hamilton and Tim Smith to represent the Fayeds in Parliament, had offered to set up a meeting with Mr Major, but Mr Fayed had rejected the offer. Last night, Mr Greer vehemently denied making the offer or being the intermediary.

Mr Major said he was referring the matter to the DPP in reply to a Commons question from a backbench Conservative MP, Sir Peter Tapsell, who asked: 'Will the DPP be examining whether Mr Fayed should be prosecuted for attempted blackmail, and also whether all those who either succeed or attempt to bribe MPs should be prosecuted for corruption or summoned before this House for contempt of Parliament?'

In a statement issued after Prime Minister's Question Time yesterday, Mr Fayed said: 'In my life I have never authorised anyone to issue an ultimatum on my behalf. That is simply not my style.

'I am very pleased that the Prime Minister has taken prompt action and if invited I should be very happy to give all the evidence I have to the independent inquiry.'

Mr Fayed said he would sue for libel 'with the expectation of recovering substantial damages' if Sir Peter repeated outside the Commons his suggestion that the Harrods chairman might be prosecuted for attempted blackmail.

He said that on 22 September he met Mr Greer, who offered to arrange a meeting with the Prime Minister: 'I rejected his offer. I did not consider him the right person to make an approach on my behalf.' He said he had wanted to speak to Mr Major. 'I wanted him to be aware of the great sense of injustic my brothers and I feel at the decision in 1987 to institute an investigation of my acquisition of House of Fraser, two years after the event.'

Mr Greer said last night that Mr Fayed's account of the September meeting was 'complete fiction'. At no stage had he offered to arrange a meeting with Mr Major. He said he was totally mystified why Mr Fayed should suggest that he was the intermediary.

A spokesman for the Crown Prosecution Service said: 'We are studying the note of the Prime Mininster's meeting. We have not asked the police to investigate the points raised in the note of the meeting.' The note was passed on to the DPP by the Prime Minister's office last Thursday.