The BBC's Joshua Rozenburg reports: "The Harrod's owner heard himself described as an habitual liar"

George Carman, QC, making his opening speech for Mr al-Fayed, told Mr Justice Morland and the jury of six men and six women that the case was all about "corruption in politics".

Mr al-Fayed says Mr Hamilton accepted money from him to ask parliamentary questions on his behalf.

Mr Carman said Mr Hamilton's claim for damages arose from a television programme on Channel 4 in January 1997. During the programme Mr al-Fayed described how Mr Hamilton had demanded gifts and payments.

The QC said the gifts amounted to £30,000 in full, and were given between 1987 and 1989. He told the court they included:

• A six-day stay at the Ritz hotel in Paris for Mr and Mrs Hamilton, which included £2,120 extras
• Four Harrods gift vouchers
• A stay in a Scottish castle
• A weekend in a Paris apartment

Mr Hamilton's "uncontrolled greed" even led him to charge stamps and laundry to his free bill at the Ritz, Mr Carman said.

In return for those payments, favours and hospitality, Mr Hamilton, who was MP for Tatton, asked parliamentary questions on behalf of Harrods and provided other very extensive parliamentary services, Mr Carman said.

Al-Fayed will face his first public cross-examination

Mr Hamilton would claim that this was a serious libel, he said, because it had gravely damaged his reputation and helped to destroy his career prospects outside Parliament.

But Mr Carman said he would "prove in this court that Mr Hamilton was a greedy and somewhat unscrupulous politician at the time".

Explaining the background to Mr al-Fayed and Mr Hamilton's relationship, he said they were introduced by political lobbyist Ian Greer in 1985.

The Harrods boss had approached the lobbyist for help in countering a "campaign" being conducted against him by business rival Tiny Rowland, now dead.

"Mr Rowland was campaigning politically to try to ensure there was a Department of Trade inquiry into how Mr al-Fayed came to own Harrods," he said.

"Mr Greer told Mr al-Fayed something you may think is quite astonishing - that you rent an MP like you rent a taxi," said Mr Carman.

'Lied to The Guardian'

The lobbyist then assembled a "quartet of MPs" - Sir Peter Hordern, Michael Grylls, Tim Smith and Neil Hamilton, Mr Carman said. Over the next four years, between autumn 1985 and 1989, Parliamentary services "were performed".

Mr Carman said that although Mr Hamilton insists "everything he did was done out of high moral conviction and high political principle... it does not square with the reality of the matter at all".

Mr Carman then told the court that Mr Hamilton had lied to The Guardian newspaper, and the then deputy prime minister Michael Heseltine, about his relationship with Ian Greer.

He had also failed to disclose a £10,000 commission payment from Mr Greer in the House of Commons register of MPs' interests, he said.

In 1997 a Commons select committee had described Mr Hamilton's list of omissions in the register as showing "casualness bordering on indifference or contempt towards the rules of the House on disclosure of interests".

Mr Carman told the jury: "We say that would very seriously have damaged his career prospects quite apart from any TV broadcast."

'Corrupt'

Mr Hamilton had resigned his post as minister in 1994, five days after the cash-for-questions allegations appeared in the national press.

Mr Carman said further proof of Mr Hamilton's "corrupt behaviour" was revealed in 1989, when he "corruptly" demanded a payment of £10,000 from multinational company Mobil Oil for Parliamentary services.

He said there had never been any discussion over Mr Hamilton being paid by Mobil for his services, because the company thought he would help them "with no thought nor question of payment".

He added: "The demand for payment to Mobil made by Mr Hamilton in the summer of 1989 was corrupt, just as corrupt as the money he took from Mr al-Fayed for asking Parliamentary questions."