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The key thing to watch for during Francis Maude’s statement is the Lib Dem reaction. At the moment, the Tories can rebut Labour’s criticisms of them by pointing to both union funding and the Ecclestone affair. But if their coalition partners start turning up the volume on this story, then the Tories are in a far more difficult position. What will drive the Lib Dems is their desire to get a deal on party funding. The Lib Dems are very keen to reduce the advantages that the Torties and Labour have on this front and this scandal presents the perfect opportunity to press for a restrictive cap on donations and more state funding for political parties.

Why would anyone pay £250,000 to change Tory policy when the Liberal Democrats would do it for £2.50 and a hug? The brilliant Sunday Times investigation today makes you wonder whether businessmen don't actually realise that out that, in this coalition, it doesn't matter what you persuade David Cameron of. Policy is decided by horsetrading with the Lib Dems, who wield disproportionate power (for good or for ill). For example, Osborne was personally inclined to bring the top rate of tax down to 40p, but the Lib Dems told him they'd only allow this in exchange for their mansion tax. Cameron refused to do the deal, so 45p it was. The rise in capital gains tax was a Lib Dem demand, and would only be changed by Lib Dem agreement.

From the Sun: ‘A LABOUR MP was arrested late last night for assault after allegedly headbutting a Tory rival in a House of Commons bar. Witnesses allege Eric Joyce, 51, launched an unprovoked attack on Stuart Andrew, 40. It is claimed Joyce, MP for Falkirk, had to be held back by several Labour colleagues. A source said: “Stuart was given a Glasgow kiss.”’ Read the full report here. UPDATE: Joyce has been suspended by the Labour Party. The Standard's Joe Murphy has a particularly detailed account of it all here.

“I certainly think it’s a serious problem and I described it when we last discussed this as a canker on the body politic and I would stay with that,” said Jesse Norman on the World at One earlier today. The Bureau of Investigative Journalism’s sting, splashed by this morning’s Independent, of executives from lobbying/PR firm Bell Pottinger boasting of their influence over the prime minister has renewed the debate about regulating the lobbying industry, with calls for a public register to be established. Downing Street has outright denied the allegations, which do sound rather far-fetched. Bravado is, of course, the currency of thin-air merchants. The objection is not to the bragging (how else can one tout ‘influence’?

Has anyone used the “Mayday” gag yet? Perhaps it's too cheap and obvious, but it's certainly applicable today. Not only are Theresa May's troubles still splayed across the newspapers — sure to come up in PMQs later — but they have also been aggravated by the man who just quit as head of the UK Border Agency's border force. So far as the bookies are concerned, the Home Secretary is now second-favourite (behind Chris Huhne) to be the Cabinet's next ejectee. As for how the former head of the UK Border Agency's border force, Brodie Clark, has made things difficult for May, I'd suggest you read his resignation statement here. In effect, he accuses May of misleading the Commons about his role in reducing border queues.

As soon as the news about G3's funding of Adam Werritty emerged, it became clear that Liam Fox was going to have to go. Downing Street had no desire to be seen to be pushing this Thatcherite out of the Cabinet, but its test has always been that Werritty could not have been receiving money from companies with any interest in defence. Once that line was crossed, Fox was always going to have to go. I suspect that the former Defence Secretary will not be a problem for Cameron on the backbenches. Fox values loyalty highly and his friends appreciate how the Prime Minister didn't push Fox at the first opportunity. Also, Fox's standing as a politician has been severely diminished by the events of the past ten days.

I've never met Adam Werritty and hadn't even heard of him before a few weeks ago. I'm also of the belief that financial wrongdoing should not be the only test used to judge Liam Fox's suitability for ministerial office. And I don't think the fact that a previous government changed ministers too often is a reason to overlook inappropriate ministerial behaviour. Whether the Defence Secretary, in fact, behaved inappropriately remains to be seen. But the signs are not, at this stage, good – even if the airwaves are now dominated by "Foxies": the Defence Secretary's friend and allies. That said, I think the self-styled advisor is getting an unfair wrap, at least based on the information available to the public.

So, who paid for Adam Werritty's air miles? This is the question going around Westminster this afternoon. James blogged yesterday that No10 has set two tests: was Werritty being paid by defence companies, and did Fox know about it?   From what I understand, the answers to both are "no". Werritty was not paid by any defence company — or, indeed, any company at all. His funds were provided by individual donors, who do not have even a tangential interest in the defence industry. His job was to network and provide updates about politics in general. His donors are interested in affairs in the Gulf and the Middle East, about energy security and other such issues — so this involved going to a lot of conferences, and a lot of travel.

The Liam Fox imbroglio has just started to make more sense. The original story was broken by The Guardian (of whom more later) and the main source appears to have been one Harvey Boulter, an American mogul whom Fox fatally agreed to meet in June at the suggestion of his friend Adam Werrity. It was the kind of meeting that a civil servant would never have arranged. Boulter was, to use a political term, toxic. He was being sued for blackmail by 3M, in a court case being fought in London, and after landing this meeting with the UK Defence Secretary he tried to use it as ammo.

Aside from Boris's exhortations to George Osborne, one of the most ear-catching lines of the day has been uttered by Jeremy Hunt. "I think the relationships between politicians and the media got too cosy," said the culture secretary on Radio 5 this morning. He's certainly not the first to make the point, but he is one of the most prominent Conservatives to do so. The words, I suspect, were chosen to cool the heat rising from yesterday's lists of meetings between ministers and media organisations. Hunt himself, it was revealed, has met seven times with News Corp types since the general election. Hunt's admission also opens the prospect of a fevered struggle between the Tories and the Lib Dems to appear less cosy with the media establishment.

Edward Llewellyn has been making headlines and there was speculation about his future. Many a right-wing MP rubbed their hands with glee, seeing Llewellyn as a ‘wet’ impediment to a tougher European policy. But, Number 10 came out strongly in support of the PM’s aide. Some people huffed, whispering that loyalty to friends like Llewellyn means more to Cameron than the health of the party. But this is a blinkered reading. First of all, John Yates himself said he thought Llewellyn had acted properly.

The questions following David Cameron’s statement to the House of Commons have just finished. As Cameron answered 136 questions, it became increasingly clear that the immediate moment of political danger appears to have passed for the Prime Minister. By the end of the session, Cameron was even joking about inviting Mrs Bone to Chequers for the weekend. In his opening statement, Cameron placed far more distance between himself and Andy Coulson than he had before. For the first time, he expressed regret about the appointment. He told the House that, ‘With 20:20 hindsight – and all that has followed – I would not have offered him the job’.