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Fresh suspicions have been raised over the death of a Tory MP found wearing stockings and suspenders with electric cord around his neck and a bag over his head.

Stephen Milligan was found dead in his west London home in February 1994, an investigators promptly ruled that he perished in a sex game gone wrong.

Earlier this week BBC journalist John Simpson suggested Milligan - who was 45 when he died - could have been killed by the KGB.

But a businessman has sensationally suggested that MI5 could be to blame - alleging the MP could have been on the verge of whistleblowing about arms sales to Iraq.

At the time he died Milligan was Parliamentary Private Secretary to defence procurement secretary Jonathan Aitken - which meant he had access to sensitive files.

(Image: Daily Mirror)

Gerald James told The Daily Mail : "If he uncovered evidence of a cover up, and was prepared to turn whistle-blower, then I believe the chances of him being killed by the intelligence services were very high."

He had been seen arguing with party whips shortly before he died, said James - who believes the death was staged.

He said: "Milligan would have known all about dirty tricks and covert arms deals. Presumably he argued with the whip because he had questioned policy and threatened to spill beans."

There were rumours that intelligence service figures had removed files from the MP's home before the death was discovered.

The MP had worked as a reporter in Moscow before being elected to Parliament, and Simpson suggested he may have found "dodgy things" going on in Russia.

The BBC journalist said the coroner's verdict of misadventure did not reflect the man he knew, reports Mail Online .

(Image: Daily Mirror)

Simpson, 74, said Russia had a motive to kill Milligan after he reported on the new Yeltsin government in Moscow.

The government, headed by Russian President Boris Yelstin, was in power between 1991 and 1999 and was marred by widespread corruption.

Simpson also notes the death of two other opponents of the Yelstin regime who died in similar circimstances.

The journalist and author was speaking at the Henley Literary Festival, promoting new book, Moscow, Midnight .

(Image: BBC)

He said: "Stephen Milligan was a real good friend of mine.

"When I read in the newspaper that he had died in this macabre fashion in this awful sex experiment with a bag over his head, I just couldn’t believe it, there was nothing in that seemed to do with Stephen."

Simpson said he began having suspicions about Russian involvement in his death after speaking to another close friend of the MP's, who said it was "obvious he was murdered by the KGB".

Simpson added: "Many people just thought it was funny or savage or were too embarrassed to have anything to do with it.

"Then he came up with the fact that at least two people, critics of the Yeltsin government, had died in the same way in Russia."

Milligan held a junior defence position in the Conservative party and had uncovered a lot of "dodgy things" during his earlier work as a reporter, Simpson said.

He went on to describe Milligan as a "lovely, intelligent and sensitive man".