By Ian Dunt Follow @IanDunt
Liam Fox has issued an apology for allowing his "professional responsibilities" and "personal loyalties" to become blurred, as he seeks to save his job after a string of damaging revelations.
The defence secretary issued the apology ahead of a report tomorrow on his conduct.
"I accept that it was a mistake to allow distinctions to be blurred between professional responsibilities and my personal loyalties," he said.
"I have apologised to the prime minister and agreed with my permanent secretary to put in place new procedures to ensure that this does not happen again.
"At no stage did I or my department provide classified information to Mr Werritty or assist with his commercial work," the statement continued.
"Nevertheless I do accept that given Mr Werritty's defence related business interests, my frequent contacts with him may have given an impression of wrongdoing."
A range of allegations hit Mr Fox after it was revealed his friend Adam Werritty was selling himself as an adviser, despite not being on the public payroll or being security cleared.
A two-week report into the defence secretary's relationship with Mr Werritty by the MoD's most senior civil servant was handed to Sir Gus O-Donnell, Cabinet Office secretary, yesterday as David Cameron scrambled to contain the row.
The prime minister insisted the report be on his desk tomorrow when he gets into Downing Street, just hours ahead of an appearance in the Commons by Mr Fox for defence questions, where he is under pressure to offer his full account of the allegations.
Even with the shortened timetable, Labour insisted the Ministry of Defence (MoD) investigation has unacceptably narrow terms of reference.
"There appear to be very significant shortcomings in the scope of the inquiry announced by the MoD," shadow defence secretary Jim Murphy wrote to the prime minister this afternoon.
"I am concerned that your judgement of Dr Fox will rest on the initial findings of the MoD-led inquiry. While any revelations from the inquiry will of course be relevant, there are important questions which I do not believe will be sufficiently addressed by this process."
Before issuing his apology Mr Fox told the Sunday Telegraph: "I have absolutely no fear of complete transparency in these matters.
"I think there are underlying issues behind these claims and the motivation is deeply suspect."
New allegations flew thick and fast against Mr Fox today, with the Observer reporting that Mr Werritty was present during a meeting between the defence secretary and the president of Sri Lanka.
The newspaper showed Sri Lankan news footage showing a man who appears to be Mr Werritty sitting with the two men – flatly contradicting Mr Fox's insistence that he had never attended meetings between himself and foreign dignitaries.
Meanwhile, there are accusations that a meeting with the chief executive of a private finance company in Dubai led Mr Fox to make promises about the raising of a dispute concerning American conglomerate 3M in parliament.
Critics have also raised questions about Atlantic Bridge, the neo-con charity designed to improve UK-US relations but which was closed down when the Charities Commission took a dim view of its political activities.
Several senior Tories, including William Hague, George Osborne and Michael Gove, sat on the advisory board, while Mr Werritty acted as chief executive, earning £90,000.
Mr Werritty attended 14 meetings in the space of just 12 months at the Ministry of Defence, despite not being on the public payroll or being security cleared.
If Mr Fox loses his job over the scandal it would seriously upset the political balance at the Cabinet table.
Mr Fox is one of the most prominent right-wingers in Cabinet and acts a bulwark against the liberal tendencies of the Lib Dems and their more moderate Conservative colleagues.
Mr Fox's strained relationship with Mr Cameron could affect the outcome of the situation, although relations were said to thaw slightly when the prime minister attended the defence secretary's birthday party last night.
Whitehall observers suggest Mr Fox will survive the scandal, but is likely to be forced to make an apology to the Commons tomorrow.