Tories 'connived to save bankrupt MP'

John Major suffered a new blow yesterday with newspaper allegations of a secret deal with the banks to give favoured treatment to a Tory MP who had faced bankruptcy in order to save the Government's tiny Commons majority, writes John Rentoul.

The charges involving Roy Thomason, MP for Bromsgrove, seem bound to add to the Tory party's troubled public image on ethical standards. Mr Thomason did not deny yesterday that he could have been declared bankrupt last November. But he said he had no knowledge of any deal between Tory figures and the banks to save him. "I have no personal knowledge of these meetings but that is not to say that they did not take place," he said, insisting: "My financial position is under control. There are no bankruptcy proceedings outstanding against me."

John Prescott, the deputy Labour leader, demanded the banks in the case come clean on whether they had conspired with the Tory hierarchy. "It now seems that we have two types of bankruptcy - one economic, the other political."

If Mr Thomason became bankrupt, he would have to resign his seat. After being declared bankrupt, an MP has six months to discharge his debts, or resign. The last MP to do so was C Homan, Tory MP for Ashton-under- Lyne, in 1928.

Mr Thomason would not comment on a suggestion that a bankruptcy demand was issued against him in June last year. According to the Sunday Times, a petition, which would formalise Mr Thomason's bankruptcy, was due to be issued at the end of October, but was not.

The MP ran into trouble when the property slump kicked in in the late 1980s, after he had built up multi-million pound interests in nursing homes and shopping centres. Other Tory MPs face serious financial difficulties, but the legal timetable cannot lead to their bankruptcy before the last date for a general election, in May 1997.