By Ian Dunt Follow @IanDunt
Labour has written to the Electoral Commission demanding a new investigation into Liam Fox following reports that his friend Adam Werrity may be funded by shadowy political donors.
An anonymous briefing to the BBC from an individual claiming to be a wealthy backer of Mr Fox suggested wealthy backers paid Mr Werritty an annual retainer to be by Mr Fox's side, on the basis that his pro-American, pro-Israeli leanings would help counteract the more sceptical views of many civil servants.
If true, the explanation would be explosive, as it suggests the defence secretary is having his views influenced by wealthy individuals outside the civil service system, breaking ministerial rules and raising serious questions about the corruptibility of Cabinet secretaries.
"As you will know, anonymous donations to regulated donees are illegal," Anas Sarwar, Labour MP for Glasgow Central, wrote to the Electoral Commission.
"I would be grateful if you could investigate the matter."
Labour leader Ed Miliband said David Cameron had been "ineffective" at dealing with the Fox scandal and that an investigation should have been established earlier.
"We've got a distracted defence secretary in a distracted government and a weak prime minister unable to make the right decision," he added.
David Cameron defended his decision not to sack Mr Fox today, as the sense of panic in Downing Street continued to spread.
"A strong leader recognises that you have to take time to get all the information and answer all the questions," he told the BBC.
"A weak leader is someone who jumps at it because of some artificial deadline. We get all the facts first and then establish a decision."
Briefings to the Daily Telegraph this morning saw friends of Mr Fox argue that the prime minister would look weak if he sacked the defence secretary.
“Going without a case against him, bowing to pressure, would turn you into John Major’s government,” one ally said.
“He is not going to be hounded out by a media hue and cry when he has done nothing wrong.”
Other briefings attempted to belittle Mr Werritty as a 'Walter Mitty' figure trying to appear as more important than he really was.
“Adam is someone who took advantage of a close friendship,” said a friend
“He pretended he is someone he is not. He’s been masquerading – it’s weird, but mostly harmless.”
Such an explanation does little to explain why Mr Werritty attended 18 overseas trips with Mr Fox and met him at the Ministry of Defence 22 times since the general election.
Cabinet Office bosses are expected to interview him again today, just 48 hours after the last session.
Mr Fox has reportedly urged him to make his financial records and details of clients available to the Cabinet secretary.