Opposition calls on government to widen investigation into links with Adam Werritty

This article is more than 8 years old

This article is more than 8 years old

The inquiry into Liam Fox's relationship with Adam Werritty should continue despite the defence secretary's decision to step down, Labour says.

The shadow defence secretary, Jim Murphy, has called on the government to widen the investigation to include a broader investigation of rules governing ministerial conduct.

He told the BBC that there were still many unanswered questions, such as who paid for Werrity to fly around the world with the defence secretary and whether they benefited from it in any improper way.

"What is the flow of money?" asked Murphy.

"Liam treated Adam Werritty as a good friend. Adam Werritty seems to have treated Liam Fox like some sort of franchise to make money from.

David Cameron's hopes that Fox's resignation on Friday will have drawn a line under the affair were dashed by a deluge of fresh claims about Werritty's financial affairs.

The Daily Mail claimed that Fox had solicited a donation from a company financing Werritty's activities while he was defence secretary – the most damaging allegation yet.

Venture capitalist and millionaire Jon Moulton revealed that Fox approached him after the general election seeking funds for a company, Pargav, set up by Werritty.

Moulton told the Times: "Before the election, I had made several, on-the-record donations to support Dr Fox following a request from the 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," he added.

It emerged on Friday that Werritty was the hidden hand behind Pargav, a not-for-profit company which had received funding from six different entities including Moulton and another investment company with links to an organisation that lobbies on behalf of Israel.

Moulton insisted that he did not seek or receive any benefits from the Tories as a result of his financial largesse.

"Neither I, nor any of my associates, have sought or received any 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.

He added: "I will not be doing this again."

Pressure continued to mount on Fox as it emerged that Lord Bell, PR consultant and one of Fox's oldest friends, was present when an employee of one of his clients passed bank account details to the Times, which revealed how Pargav was funded.

According to the Daily Mail Moulton bought a defence company eight months before giving money to Pargav.

In February 2010, Moulton reportedly paid £60m for Gardner UK, which makes components for aircraft including RAF fighter jets and troop transporters.

He reportedly gave a sum of up to £35,000 to Pargav in October of that year.

The cabinet secretary, Gus O'Donnell, who is heading the internal inquiry to the Fox affair was due to publish his report next week.

However Murphy said the goalposts had changed and this inquiry now needed to switch focus.

"So we need to know as part of the inquiry just where's the money? Why has Liam resigned? Let's continue to carry out the investigation and if need be, broaden the investigation further."