But the criticism could get worse as he tries to steer the party towards its

But the criticism could get worse as he tries to steer the party towards its new approach to Labour, by ending its traditional policy of equidistance between Labour and the Tories. Former Liberal leaders in the Lib-Dems are planning to oppose the shift in the party's attitude towards Labour, backed by Lib-Dem councillors who are fighting Labour for seats in local government.Mr Ashdown is positioning the Lib-Dems to hold the balance of power in a hung Parliament with Labour. That could give him a powerful bargaining position, possibly as defence secretary in a Blair Cabinet supported by the Lib-Dems.His growing nightmare is that the Liberal Democrats are being overtaken by the appeal of Mr Blair's Labour Party. SDP members who joined the Lib- Dems because they regarded Labour under Neil Kinnock as dominated by the left wing, are being wooed back to Labour.

The Lib-Dems appeal to middle class voters is being overshadowed by Mr Blair, increasing Mr Ashdown's fears that his modernising wing of the party is being outflanked by Labour modernisers.. JOHN EISENHAMMER Financial Editor The Serious Fraud Office lied to Parliament in an attempt to cover up its bungled prosecution of the Levitt fraud trial, MPs said during a tense Commons select committee meeting yesterday.George Staple, director of the SFO, was visibly shaken as he left a two- hour grilling by the Treasury and Civil Service committee, during which MPs called for his resignation."I think Mr Staple ought to be considering his position; there are serious issues of public concern at stake here," said the Labour MP Mike O'Brien, who called for an independent judicial inquiry into the affair."I charge here that the prosecution of the Levitt case was bungled by the SFO and its counsel. Referring to all the evidence before the committee, I charge that you attempted to disguise this, and that Parliament was misled on two important counts: namely that the SFO made no suggestions of plea bargaining, and that the Crown knew nothing about Levitt only pleading guilty to a charge which did not involve going to prison."An SFO source said last night that Mr Staple did not thgink he had done anything to warrant resigning. Mr Staple earlier told the committee that the charges were "outrageous". He had been recalled by the committee after apologising for giving MPs incorrect answers in his earlier statements on the SFO's role in the Roger Levitt trial.Having originally faced 62 charges of theft, fraud and deception, and allegedly misappropriated pounds 59m, Levitt's sentence in November 1993 to 180 hours of community service unleashed a storm of protest and speculation about secret deals.The SFO, Sir Nicholas Lyell, the Attorney General, and David Cocks QC, leading counsel for the prosecution, all denied deals had been done, and expressed surprise at the lenience of the sentence.The committee had received detailed accounts from all the lawyers involved in the Levitt case, including damning allegations of mishandling of the prosecution.

MPs confronted Mr Staple with detailed accounts from six defence lawyers claiming the Crown had been engaged in persistent plea offers in the closing weeks of the case, and the prosecution knew full well Levitt finally agreed to plead guilty to a minor charge only on condition he did not go to prison.MPs said an answer to Parliament on 9 December 1993 by the Attorney General stating that no suggestions of deals had been made by the Crown was misleading, and that evidence from both defence and prosecution lawyers showed the Crown had suggested pleas. "I am quite confident suggestions were made by the Crown and you are wrong," Mr O'Brien told Mr Staples. The SFO director denied this, and said Parliament had not been misled.Reading from the submitted evidence of Mr Cocks, MPs said that a discussion by prosecuting counsel on 9 November amounted to a suggestion of a deal. "I agree there is a range of possibilities that there were suggestions, but we have always taken the view that it was all about counsel-to-counsel confidential discussions, and that all the prosecution did was respond to suggestions made by the defence," said Mr Staple.Evidence to the committee by Howard Godfrey, counsel for one of Levitt's co-defendants, showed the Crown involved in plea bargaining since May 1993, becoming clear and persistent offers from 1 November.

"I can confirm that from early November 1993 the prosecution appeared keen to accept reduced pleas and to 'carve' the case," wrote Brian Lett, a defence solicitor, in evidence.Mr Staple admitted that at a crucial meeting on 5 November at the SFO's office he told prosecution lawyers that he was "minded to accept" reduced pleas being discussed But he denied this amounted to an instruction. "You are quibbling over words," said Diane Abbott, Labour MP. "If an ordinary member of the public had been there, they would have come away with the clear impression you would accept the pleas."Asked who wrote the allegedly misleading answers to Parliament of 9 December 1993, Mr Staple said: "The answers were granted, and cleared, I regret not by me, but by Mr Cocks."The Tory MP Quentin Davies replied: "The facts that have now emerged are that Mr Cocks misled the SFO, the SFO then misled the Attorney General, and the Attorney General in turn inadvertently misled Parliament. That is an extremely regrettable state of affairs."The committee will meet again on Monday.. IAN MacKINNON They had tramped the samecountry lane for 188 years. Yesterday, later than planned by almost 48 hours - some violent, many dull - the Orange brethren from the Co Armagh town of Portadown made it 189. Only silence and the sound of 500 pairs of marching feet filled the air as they conducted their 20-minute parade, bereft of their cacophonous bands as part of the deal struck with Catholics.Yet there was no hint of defeat.

Indeed, with purposeful strides and heads held high, the marchers in their Orange sashes exuded a flinty-eyed pride that the tradition of their forebears had been preserved for another year against the backdrop of swelling Nationalist resistance along the Garvaghy Road route.For many hours in the tense two-day stand-off that began after police barred the march as men from Portadown's Orange Lodge spilled from the pews of Drumcree parish church, it had appeared they would not get their way. Yet as the hours passed, tempers frayed and numbers mushroomed.As the often dignified protest by white-haired gentlemen degenerated into running battles between police and the young bucks, it was clear something had to give. Several thousand loyalists stood in darkened fields in driving rain awaiting word from the negotiators.At 9.30am yesterday the Rev Ian Paisley, the Big Man to devotees, gave that word: a deal had been done. A few minutes before 10.30am the marchers emerged through the ranks of police with their Portadown District Lodge No 1 standard at the head. Three abreast they walked, some in their Sunday best, others in football shirts, such is the diversity of the pull of Orangeism for young and old.Police manning road-blocks observed the bizarre spectacle, which could probably only happen here. Even Catholic residents who had been blocking the route parted to watch in silence, only cheering as the last passed.Brendan McKenna, of the residents' group, was optimistic about what had been achieved: "Through negotiations .. solutions can be reached. If the peace process holds, this is a demonstration of what can come out of it."Yet in the distance a band hailed the approaching marchers and they were cheered by thousands of supporters.Back at Drumcree church there was no triumphalism, only quiet satisfaction from one lodge member: "We went to church on Sunday, and came home from church, which is what we have done for 188 years.".