Hamilton and his wife, Christine, are considering suing Nadine Milroy-Sloane after she made allegations of sexual assault against them. Police have said the couple are innocent of all the charges.

However, the allegations arose in the middle of efforts to recover Pounds 2m for the creditors of Hamilton who racked up the debts as a result of his libel battle with Harrods owner Mohamed Al Fayed.

Some creditors are surprised that Hamilton appears able to afford another expensive libel case. Neil Hamilton's bankruptcy is being handled by Baker Tilly partner Louise Brittain who was appointed trustee in June this year.

She would not comment on the latest fears around the Hamilton case.

Brittain, who handled the bankruptcy of Johnathan Aitken, is still investigating all of Hamilton's assets and those that arise from the sale of his country house that is currently on the market.

Brittain is likely to investigate whether other assets have been transferred elsewhere that might be reclaimable for creditors.

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Disgraced: Baker Tilly to handle 'cash for questions' ex-MP Neil Hamilton