Foster plans to add his own 'sensational twist' to the Cherie Blair controversy

Peter Foster will try to reignite the "Cheriegate" affair today by revealing a "sensational twist" to the affair.

With signs that the political and media storm over Cherie Blair's purchase of two Bristol flats is abating after two weeks, the convicted fraudster is planning a statement on the saga.

Mr Foster is expected to announce he is giving up his deportation fight and will return to Australia before Christmas.

There was unconfirmed speculation yesterday that Carole Caplin, his girlfriend and fitness adviser to Mrs Blair, could follow him in the new year. Friends of the couple have denied that they have split up, and Mr Foster was seen at her home in London yesterday.

Mr Foster is expected to claim that he, rather than his solicitors, faxed legal papers on his threatened deportation to Ms Caplin at Downing Street and later discussed them personally with the Prime Minister's wife. The latter claim is in flat contradiction to Mrs Blair's assertions.

Downing Street was heartened that the furore receded from many of yesterday's front pages. However, it emerged that one of the two trustees of the Blairs' blind trust is the London lawyer Martin Paisner. His firm, Berwin Leighton Paisner, holds government contracts worth millions of pounds and has recently worked on the sale of the Millennium Dome and Wembley Stadium. Mr Paisner and Downing Street declined to comment.

The News of the World, meanwhile, confirmed that it had made an offer for Mr Foster's story, but would not put a figure on it. It said in a statement: "There are many unanswered questions which we believe are of great public interest. On Saturday we were advised that Downing Street had convinced Mr Foster he had nothing of worth to say at this stage." Downing Street said: "We have not been in communication with Mr Foster."

Clive Soley, chairman of the Parliamentary Labour Party, admitted yesterday that Mrs Blair had made a "disastrous" error by not being frank over her links to Mr Foster. But he added: "One of the things we need to address in the future is whether we don't need some public standards body to refer cases like this to, but also a beefed up, independent – and I stress independent – Press Complaints Commission."

Asked if he believed the story had now died away, Mr Soley replied: "No, I don't think it has, I think it [the press] will come back to it, although I think the main guts of it have gone out."

Announcing plans for his statement, Mr Foster said last week: "There is going to be a sensational twist in all this ... I've held my tongue for two weeks. But now I've decided that enough is enough."

In secretly recorded conversations between him and his mother, published in The Sun last week, Mr Foster claimed to be sitting on secrets that could damage the Blairs. "I've got plenty of ammunition I can fire at them, you know," he is alleged to have said. "Cherie knows what she did and I know what she did. And I said I'd never talk, but if I have to talk to protect myself, I will."