The opposition leader - back at the despatch box after a three week break for a sinus operation - launched a comprehensive assault on Labour for encouraging a "culture of cronyism."

He accused the prime minister of protecting the "money grabbing" hangers on he had surrounded himself with.

And he declared: "Even with my sinuses I could smell the stench coming out of these revelations."

With Labour clearly on the back foot, he seized on the cash-for-access row, the leaking of the White paper on the defence review and the business affairs of beleaguered Paymaster General Geoffrey Robinson.

Turning on the prime minister, he challenged: "Doesn't he recognise that government without principle very quickly becomes government for sale and that is what is at is now beginning to happen.

Claiming recent events would be a "defining moment" for the government he said voters would now see Labour for what it was - "too many cronies and too few principles."

"They are feather-bedding pocket-lining, money-grabbing cronies and should actually clean up the act of this government."

There have been suspicions that the government deliberately leaked the defence review as a way of keeping the cash-for-access row off the front pages on newspapers.

Mr Hague didn't repeat the claims, but said: "Only a prime minister in desperate trouble can believe that a leak of a government didn't somehow originate with the document. What a ridiculous thing to say."

The prime minister hit back, insisting the opposition was trying to claim his government was as sleaze-ridden as the last Tory administration.

And he flatly rejected claims of wrong doing by his ministers saying allegations about cash-for-access were false and that anyone found guilty of leaking the defence review would be "out on their ear."

"If I find anybody involved in the Ministry of Defence or any other ministry that has leaked this document I will dismiss them.

And he announced that cabinet secretary Sir Richard Wilson had already been ordered to revise the rules covering relations between government employees and outside groups "in any way he sees fit."

"All the allegations are general and he is making general allegations because he knows he can't sustain a single specific one. That is a classic smear tactic."