The defence secretary, Liam Fox, has resigned.

More details soon ...

How the Guardian broke the story

The Guardian's Rupert Neate broke this story in June and has led the way in uncovering new developments. Here's how the story unfolded:

27 June 2011



Government weighs into 'blackmail' row over 3M and MRSA test



13 July 2011



US firm 3M could summon Liam Fox to give evidence in blackmail case



7 August 2011



Liam Fox forced into U-turn over legal spat with US multinational 3M



18 August 2011



Liam Fox's friend set up crucial legal meeting



29 August 2011

Liam Fox under fresh pressure over adviser



4 October 2011

Liam Fox faces questions for allowing former flatmate access to MoD



5 October 2011

Charity created by Liam Fox axed after watchdog issues criticism



7 October 2011





Liam Fox was joined by former flatmate on official visit to Sri Lanka



Liam Fox had already been warned over Adam Werritty links



Liam Fox, his adviser, and an irregular meeting in Dubai



'Adviser' Adam Werritty ran charity from Liam Fox's office



8 October 2011



Businessman met Fox's friend two months before 'chance' Dubai meeting



Emails and video footage pile pressure on beleaguered Liam Fox



10 October 2011

Revealed: how lobbyists were paid to facilitate meeting with Liam Fox



Werritty remains silent as spotlight falls on his earning and business dealings



11 October 2011

Liam Fox battles to save career as PM gives only conditional support



Liam Fox row: Adam Werritty to be quizzed over sources of income



12 October 2011

Liam Fox furious as friends brief against Werritty



13 October 2011

Liam Fox took five MPs to Washington with donor's money



Labour questions £170,000 cost of Liam Fox's official advisers



Liam Fox faces fresh questions on Sri Lanka links



Fox and Werritty joined stag party during taxpayer-funded trip to Dubai



14 October 2011

Rightwing Tories rally to Liam Fox's side



The defence secretary, Liam Fox, has resigned after increasing pressure over his links to his unofficial adviser and best man, Adam Werrity. His office has just confirmed the news.

In his resignation statement, Fox said he "mistakenly allowed the distinction between my personal interest and my government activities to become blurred".

This is the second forced resignation since the coalition was formed. The first was the Lib Dem David Laws, who stepped down soon after becoming chief secretary to the Treasury over his expenses.

You can see all of the Guardian's coverage of the Liam Fox story since June here.

Tory MP Peter Bone says "it's typical of Liam to put the country first" in resigning. "I think it was largely a media-driven [story]. I didn't see the hanging offence, I'm afraid," says Bone.

Here is a bit more detail from Fox's statement:

I mistakenly allowed the distinction between my personal interest and my government activities to become blurred. The consequences of this have become clearer in recent days and I'm sorry for this.

Here is Liam Fox's letter of resignation to the prime minister in full:



Dear David, As you know, I have always placed a great deal of importance on accountability and responsibility. As I said in the House of Commons on Monday, I mistakenly allowed the distinction between my personal interest and my government activities to become blurred. The consequences of this have become clearer in recent days. I am very sorry for this. I have also repeatedly said that the national interest must always come before personal interest. I now have to hold myself to my own standard. I have therefore decided, with great sadness, to resign from my post as secretary of state for defence — a position which I have been immensely proud and honoured to have held. I am particularly proud to have overseen the long overdue reforms to the Ministry of Defence and to our armed forces, which will shape them to meet the challenges of the future and keep this country safe. I am proud also to have played a part in helping to liberate the people of Libya, and I regret that I will not see through to its conclusion Britain's role in Afghanistan, where so much progress has been made. Above all, I am honoured and humbled to have worked with the superb men and women in our armed forces. Their bravery, dedication and professionalism are second to none. I appreciate all the support you have given me – and will continue to support the vital work of this government, above all in controlling the enormous budget deficit we inherited, which is a threat not just to this country's economic prosperity but also to its national security. I look forward to continuing to represent my constituents in North Somerset. Yours ever, Liam

The resignation letter goes into very little detail about his links with Adam Werrity or the allegation that he was in effect running a shadow foreign policy regarding Sri Lanka. He says only that he "mistakenly" allowed the distinction between "my personal interest and my government activities" to become blurred, and that the "consequences" of this have become clearer.

David Cameron has said he is very sorry Fox has resigned but "I understand your reasons".

Fox's was a tricky case to handle for Cameron. The prime minister will not have wanted to alienate his own right wing by being seen to abandon one of their most high-profile standard bearers. Fox was a leadership rival of Cameron's in 2005 and may have seen himself as a replacement for Cameron one day. In that sense he may be more dangerous for Cameron on the backbenches, where he may become a focus for internal Tory opposition to the prime minister.

My colleague Allegra Stratton has written about Fox's resignation here. She points out that Fox is the first Tory to be forced out of the coalition, and the resignation will trigger the prime minister's first reshuffle, "an operation he had wanted to hold out doing until half way through the parliament". It is expected Cameron will perform a limited reshuffle, Allegra writes, merely replacing Fox without going reorganising his entire government line-up.

Fox is said to have crumpled under the weight of this week's revelations and the prospect of another weekend of speculation He could not hold out until the inquiry into his behaviour wound up officially – expected to be at some point next week. The prime minister had always held out the right to exercise his own judgment and keep Fox in his post even if O'Donnell's report had been critical, but the defence secretary decided to short-circuit the process and limit the personal and political damage. It is understood that Werritty's appearance before Sir Gus O'Donnell – the man performing the inquiry to establish the propriety of his work – did not impress the cabinet secretary.

Here is the full text of David Cameron's letter to Liam Fox. Like Fox, Cameron (left) focuses on his work as defence secretary, especially in Libya and in reforming the finances of the Ministry of Defence.

Dear Liam, Thank you for your letter. I understand your reasons for deciding to resign as defence secretary, although I am very sorry to see you go. We have worked closely for these last six years, and you have been a key member of my team throughout that time. You have done a superb job in the 17 months since the election, and as shadow defence secretary before that. You have overseen fundamental changes in the Ministry of Defence and in our armed forces, which will ensure that they are fully equipped to meet the challenges of the modern era. On Libya, you played a key role in the campaign to stop people being massacred by the Gaddafi regime and instead win their freedom. You can be proud of the difference you have made in your time in office, and in helping our party to return to government. I appreciate your commitment to the work of this government, particularly highlighting the need to tackle the deficit, and the relationship between Britain's economic strength and our national security. You and Jesme have always been good friends, and I have truly valued your support over the years. I will continue to do so in the future. Yours ever, David.

Jesme is Fox's wife, Jesme Baird.

Jim Murphy, Fox's Labour shadow, has put out a statement calling the defence secretary's resignation "unavoidable and inevitable".

Throughout these events I haven't called for Liam Fox's resignation but just the full truth.



Governments must have rules and ministers must have standards, Liam Fox fell foul of the standards and he broke the rules. It was clear early on that he had breached the ministerial code.



This issue has centred solely on his judgment and his conduct in one of the most serious jobs in the country. With so much at stake for our forces the defence secretary must be focused solely on his public duties.



The government has shown how out of touch it is by spending the whole of the last week worrying about how to save Liam Fox's job. That time should have been better spent trying to save the jobs of tens of thousands of hardworking people.

Below the line, Hallasan comments:

Apparently he resigned last week but gave the letter to Letwin to pass on to Cameron ...

My colleague Lizzy Davies has been looking at Fox's career.

Fox, appointed as the defence secretary by David Cameron last May, never had the typical background of a rightwing Tory, but his popularity on the right has continued to grow since his entrance into national politics in 1992. Strongly Eurosceptic, with hardline anti-abortion views and hawkish foreign policy, he established himself as a truculent minister who was not afraid to make clear his opposition to coalition policies and Cameron's "compassionate conservatism". Brought up on a council estate in East Kilbride, Fox attended a local comprehensive school before heading to Glasgow University to study medicine. Canny and convincing, he climbed the ranks of the Tory party, becoming a senior government whip during John Major's time in Downing Street and, as a Foreign Office minister, brokering the so-called Fox peace plan for Sri Lanka – a 1996 accord aimed at bringing about an end to that country's vicious conflict. His interest in Sri Lanka continued throughout his career, as was made clear when it emerged on Sunday that his former flatmate Adam Werritty had attended a meeting between Fox and the Sri Lankan president, Mahinda Rajapaksa. Following Labour's victory in 1997, Fox occupied various roles in the shadow cabinet, with portfolios including health and, finally, defence. Following the defeat of Michael Howard's Conservatives at the 2005 general election, he staged a bid for the leadership, positioning himself as a champion of social conservatism. Fox came third, his 51 votes not far behind David Davis's 57 but dwarfed by Cameron's 90. As soon as he was able to form a government, Cameron brought his erstwhile foe into his cabinet and gave him one of the most high-profile jobs going. If the prime minister had hoped to soothe old tensions, however, he failed – at least partially. Although a firm partner on Libya who overcame initial reservations to help co-ordinate the conflict, Fox was not one to toe the line. On two occasions, the Scot wrote letters – subsequently leaked to the media – expressing grave doubt about government policies. The first warned of the "damage to morale" that could result from cuts in the defence budget, and the second opposed a significant increase in Britain's foreign aid spending. Both moves bolstered his support among rightwing Tories, already feeling cold-shouldered in the coalition with the Liberal Democrats. But they did nothing to endear him to No 10 – something on which Fox now has plenty of time to reflect.

Tim Montgomerie of ConservativeHome says David Cameron has handled this very well. There have been times when ministers have been forced out too quickly, and later been found not to have deserved it.

David Cameron has believed that a man is innocent until proven guilty.

He says Fox did the right thing to refer this to civil servants, and then to Gus O'Donnell, the head of the civil service.

"It is very important to state that … he hasn't been found guilty of anything approaching corruption," Montgomerie says. He pays tribute to Fox for his work as defence secretary, mentioning the few civilian casualties in the Libyan campaign.

He says Fox is now "diminished", but "he may have a big future still to play in the Conservative party".

Trevor Kavanagh of the Sun says he agrees more with Murphy than Montgomerie. Adam Werrity had posed as an adviser to the defence secretary, "a highly sensitive role", in which many lives are at stake, the former political editor says.

"To have dragged it out this long was an act of vanity by Dr Fox," Kavanagh says.

Werrity "had a role in the life of Dr Fox which was not appropriate for a serving secretary of state", he says.

Werrity's unofficial role was a "deception". "He was simply a pal - that does not work in government."

Tory MP Louise Mensch has tweeted her sorrow at Fox's resignation.

Very sorry indeed Liam Fox has resigned. He was an outstanding Secretary of State for Defence and a completely dedicated minister.

Some more comments from below the line:

chrisbarson:

As a resident of North Somerset, I plead that Dr Fox resigns as our MP. I do not trust him - who would?

SirOrfeo answers the question of who will replace as Fox as defence secretary.

How about Adam Werritty? He's already got the stationery. In seriousness, I have no idea. Could even see a surprise return by David Laws, although that would probably mean bye-bye to one of the other Libs in the cabinet. Or maybe Chris Grayling? But chances are it'll be a minor reshuffle of the existing faces - someone innocuous like Andrew Mitchell I imagine.

Fraser Nelson of the Spectator points out how difficult a reshuffle is for a coalition PM: balancing Tories and Lib Dems, as well as the wings of each of those parties. He suggests Philip Hammond, the Tory transport secretary, may replace Fox.

Jim Murphy, the shadow defence secretary, is speaking to the BBC. He says ministers have to have standards and Fox fell short of that. He says he "feels sorry for Liam as a person".

Why did Labour not ask for his resignation? Murphy says politicians can be too quick to ask for resignations. He wanted the truth. An investigation "was what Liam was entitled to".

It would appear that the facts have caught up with Liam and he has had to resign.

Politicians shouldn't throw demands for resignation "around like confetti".

Murphy wants "an independent inquiry into this entire business".

How was a government minister able to behave in this way? ... How was that not tracked down by the civil service? Who knew what and when>? ... It's now a question for the wider issues related to the government's behaviour ... Liam's resignation can't lead to the truth being buried.

Murphy says David Cameron "probably acted too slowly to get on top of this crisis".

He wants Cameron to "fill this post quickly, to have some clarity ".

Fox is unlikely to cause trouble for Cameron on the backbenches, says James Forsyth, the Spectator's political editor:

I suspect that the former defence secretary will not be a problem for Cameron on the backbenches. Fox values loyalty highly and his friends appreciate how the prime minister didn't push Fox at the first opportunity. Also, Fox's standing as a politician has been severely diminished by the events of the past 10 days. If he did want to cause trouble, I doubt that he'd find more than a handful of supporters on the backbenches.

Tory backbencher Bernard Jenkin, a former shadow defence secretary, told the Press Association:

I am very sorry that Liam has felt compelled to resign, but he will know that he is doing the right thing. The main concern must now be to ensure continuity in the MoD, one of the most challenging of departments, at a time when our armed servicemen and women are highly stretched on combat operations.

Former Liberal Democrat leader Sir Menzies Campbell said:

Dr Fox has bowed to the inevitable. It had become impossible for him to draw a line under the story. These events had undoubtedly begun to affect his authority and the morale of his department.

An interesting comment from SteB1:

Think more than anything else Liam Fox's resignation shows what appallingly bad judgement David Cameron has. It was clear to anyone with an ounce of common sense that inevitably Fox would ultimately have to resign. It was also clear that the longer Liam Fox remained in office, the more this story would build. Because even in the best case scenario these were serious errors of judgement, repeated breaches of the ministerial code, and the explanations Liam Fox first gave, have been repeatedly contradicted by new information that kept emerging. The PM must be extraordinarily incompetent if he couldn't foresee what was going to happen. You would have to assume that David Cameron naively thought that if he put a lid on it, eventually it would blow over. When it was always clear to anyone with good judgment that as long as Liam Fox remained in office that this story would run and run, with yet more damaging revelations emerging. It's very worrying that our prime minister appears to be one of the few people in the country that couldn't foresee the inevitable happening. He showed the same bizarre lack of judgement in hiring Andy Coulson, and all his other dealings with NI. So it shouldn't just be Liam Fox resigning, but his boss. Just how many times does it take for David Cameron to exhibit the same remarkable lack of critical judgement, before those with stars in their eyes wake up to how incompetent he is.

Fox telephoned Cameron in his Oxfordshire constituency to inform him of his decision to resign, the Press Association is reporting.

PA says the prime minister had been prepared to let him carry on until Sir Gus O'Donnell had completed his inquiry - despite the prospect of another weekend of damaging headlines.

Fox received strong support from Tory backbenchers when he appeared in the Commons on Monday and, despite a difficult relationship in the past, Cameron appeared reluctant to wield the axe unless it was clear he to go. There has been no suggestion that Fox profited personally in any way from the relationship, but there have been increasing questions as to what Werritty and backers were getting from it. Many of his supporters share Dr Fox's strong pro-Atlanticist, pro-Israel views and MPs have questioned whether he was effectively running a parallel private operation, circumventing his official civil service private office.

Barry Neild here taking over from my colleague Paul Owen.

As speculation mounts over who is to replace Fox at the Ministry of Defence, my colleague Dan Milmo has been looking at Philip Hammond, the transport secretary, who has been tipped as a possible successor.

As with other Whitehall ministries from the beginning of the Blair era, the Department for Transport hotseat has rarely been occupied long enough in recent years for incumbents to leave a lasting impression. However, Philip Hammond has gained a widespread respect that most of his predecessors lacked, despite taking on a dire brief that includes inflation-busting fare rises, a countryside-gouging high speed rail project and a horlicks of an airport policy. He is in complete command of his brief, say prominent figures in public transport, motoring and aviation, even if they are at odds with coalition government policy (or more pointedly, the lack of it). Journalists who encounter Hammond - a polite, understated chap - can run into difficulties with their shorthand because he has a knack for rattling off perfectly formed paragraphs on any subject you care to mention. He is also relatively nifty with the media, for instance offering BAA the services of the army during the Heathrow snow chaos even though it was totally impractical (of course BAA had to decline). But it looked pro-active as BAA flapped in the drifts. If Cameron wants a capable, low-key replacement for Fox, then Hammond will more than do.

A very short interview with Cameron on Sky just now. Cameron repeated comments in his earlier statement, praising Fox's work.

He said: "I think I quite understand why Liam Fox has decided to resign but I'm sorry to see him go." He added: "I wish him well in the future" and said he would be announcing Fox's replacement shortly.

Some more reaction via the Press Association, including comments from Peter Luff, a defence minister, who said he hoped Fox would be allowed back into the Cabinet after a period in exile on the backbenches.

Luff told BBC News:

As a minister he was genuinely outstanding. He had that clarity of purpose and that firmness of purpose which you need to be a Cabinet minister, and we haven't got many of them in British politics. We need people of quality and I think the country would be well-served by his return in due course."

Labour MP Dan Jarvis, a former officer in the Paras, said Fox had done "the right thing" by resigning.

Over the last week we have been shocked by the facts which have come to light over numerous breaches of the Ministerial Code Liam Fox has fallen short of the standards expected by our Armed Forces on the front line, the electorate and his colleagues. The prime minister has spent the last week trying to save the job of Liam Fox, when his efforts would have been best served trying to save the jobs of thousands of military personnel who face redundancy and thousands of people across the country who are worried about their future in the current climate.

Sky News reporting that Philip Hammond, the transport secretary, has been named as Liam Fox's successor, quoting sources. You can read our profile of Hammond here.

Here's a nice photo gallery looking back over Liam Fox's career since 2000.

Philip Hammond has been named the new defence secretary, the Press Association reports. Hammond will be replaced as transport secretary by Justine Greening.

Jon Moulton, a venture capitalist who has been listed as making several donations to Pargav – a not-for-profit company set up by Adam Werritty – has issued a statement saying he won't be doing it again.

Before the last election I had made several, on the record, donations to support Dr Fox following a request to do so from a Conservative Party fundraiser.

After the election I was asked by Dr Fox to provide funds to a non-profit group called Pargav involved in security policy analysis and research and after obtaining written assurances as to its activities I provided personal funding to Pargav. Neither I, nor any of my associates, have sought or received a benefit of any form from Pargav. I have not received an account of Pargav's activities, nor have I been involved at all with Pargav, since funding. I will not be doing this again.

Guardian columnist Marina Hyde shares her take on the Fox situation, savouring the troubles facing Cameron's Cabinet. She draws parallels between Fox's plight and the strange story of Conservative minister Oliver Letwin's habit of dumping documents in park bins.

When the grimmest financial unknowns are battering at the door, there is great comfort to be had in sitting back to enjoy a classic old-fashioned defence scandal with a side order of innuendo. Sling another chair leg on the fire, and let's hope that some tear in the scandal continuum will see the bin story collapse into the rather more radioactive buddy movie that is Defence Secretaries Like Us.

The official confirmation of Philip Hammond's appointment has come through from Downing Street, with details of two other new appointments:

Chloe Smith MP, currently an Assistant Whip in the House of Commons, to become Economic Secretary at HM Treasury;

Greg Hands MP to become an Assistant Whip in the House of Commons.

Smith will replace Justine Greening, who is replacing Hammond.

It's still a very limited reshuffle, with Cameron clearly keen not to use Fox's exit as an excuse for a wholesale Cabinet shake up.

Some background on Greening from the Press Association:

Greening joins the Cabinet at the age of 42, six years after entering Parliament as MP for Putney in 2005. Her elevation follows a solid performance as economic secretary to the Treasury since the formation of the coalition Government.

My colleague Nick Hopkins writes here about the upheaval now facing the Ministry of Defence in the wake of Fox's resignation. Nick says ministry officials agreed Fox made mistakes but had hoped he would stay simply because it would be tricky to continue implementing the changes that Fox has set in motion.

The resignation of Liam Fox came as no great surprise to his colleagues at the Ministry of Defence. The welter of coverage over the last few days, and the revelations within them, made that inevitable. But many in the building were still clinging to the hope that he might survive; not because they shared his politics, or believed he had done nothing wrong; they all thought he had been "a bloody fool", as one army commander put it. Rather, those who hoped Fox would stay argued that he was the architect of reforms that will have a profound effect on the military over the next decade, and he should see them through. The idea of further upheaval in a department that has had more secretaries of state over the last decade than almost any other, was deemed a change too far. "This is the last thing we need right now," said one senior official. "What we would give for a period of stability." Fox's successor will inherit a department that is in transformation, and one that is reshaping itself at a time when British forces are involved in two military campaigns abroad. The job comes with an unappealing domestic backdrop too – poor morale and sweeping redundancies; up to 60,000 military and civilian personnel will leave over the coming years.

If photographic evidence tweeted by my colleague Peter Walker is to be believed, Justine Greening, who has been promoted to transport secretary as a result of Liam Fox's resignation, might be good news for cyclists.



The Guardian's full story on the appointment of Philip Hammond as Liam Fox's replacement and Justine Greening's promotion to transport secretary is now live.

Liam Fox, who has yet to appear publicly since resigning earlier today, has returned to his home in his constituency of North Somerset, the BBC is reporting. A reporter at the scene says security personnel hustled him away from Fox's house after he saw the arrival of a car he believes was carrying Fox.

The Guardian's Patrick Wintour has some words of comfort for David Cameron on his performance in a difficult week that culminated in the resignation of Liam Fox. He suggests the prime minister deserves to "pat himself quietly on the back" for his exemplary handling of the first resignation of a Conservative from his cabinet.

Cameron showed calm and humanity in his handling of this painful episode, ever since Fox felt forced a week ago to set up an inquiry into his relationship with his friend Adam Werritty. The prime minister insisted that he would wait for the facts, not bow to the demands of newspapers for a head. That required him to endure a difficult prime minister's questions and see a high profile speech on immigration on Monday submerged in a welter of questions about Fox. At the twice-daily lobby, the prime minister's spokesman stonewalled as a steady drip of revelations started to overwhelm Fox's defences. Cameron could have let it be known that he was unhappy, as indeed he was, that Fox had set up an internal Ministry of Defence inquiry without seeking the sanction of Downing Street. He could have said he was compelled by the findings of the interim report to declare that it was self-evident that Fox had broken the ministerial code. To do so, all he would have had to do was point to his own portentous foreword to the ministerial code: "In everything we do – the policies we develop and how we implement them, the speeches we give, the meetings we have – we must remember we are not the masters, but the servants. Although the British people have been disappointed in their politicians they still expect the highest standard of conduct. We must not let them down. We need to be different in how we think and how we behave. We must be different from everything that has gone before

Philip Hammond, the new defence minister, has released a statement through the MoD in which he praises his predecessor, Liam Fox, and how he is "saddened" by the circumstances under which he been appointed.



I have always been a huge admirer of the professionalism and the dedication of our Armed Forces, so it is a real honour and privilege to be asked by the Prime Minister to take on this role and work with them in maintaining our nation's security This is a particularly important time for defence. The priorities are the continuing operations overseas and the transformation of the way defence is organised. I am obviously saddened by the circumstances in which this opportunity arises. I think Liam Fox did a brilliant job in turning round the chaos that Labour left behind and in starting to build a sustainable future for our armed forces. I look forward to picking up the baton from Liam and working closely with the Prime Minister, Foreign Secretary and International Development Secretary to ensure that our defences are robust and that the finances that lie behind them are equally robust. Finally, I pay tribute to our Armed Forces and the civilian personnel who support them. Their dedication, professionalism and heroism is unquestionable and I look forward to working with them to help shape defence for the better.

Here's a couple of stories wrapping up our coverage for the night. Firstly, our front page report outlining the main developments before and after Liam Fox's resignation. Also worth reading is this piece outlining the money trail left by Fox's friend and self-style adviser Adam Werritty that appears to have been the final trigger for today's resignation.

Before we go, here's a summary of the main events:

Liam Fox has resigned as defence secretary under the pressure of relentless revelations about his close friend Adam Werritty. Fox becomes the first Conservative minister to exit David Cameron's cabinet.



Philip Hammond, the former transport secretary, has been named as Fox's successor. Hammond will be replaced by Justine Greening, an economics minister and one of the youngest faces in Cameron's government.



Fox said in a resignation letter that he had "mistakenly allowed the distinction between my personal interest and my government activities to become blurred". He said by resigning he was putting "the national interest" before "personal interest".



David Cameron said he was "very sorry" to see Fox go. "You have done a superb job in the 17 months since the election, and as shadow defence secretary before that," he said.