In an exclusive interview ahead of the Tory conference in Manchester, Liam Fox, the Shadow Defence Secretary, hits out at the Prime Minister’s continued silence over whether the decision to free Abdelbaset Ali Mohmed al Megrahi, the man convicted of Britain’s worst terrorist atrocity, was right or wrong.

Dr Fox, a former Glasgow GP, said the effect of Scottish Justice Secretary Kenny MacAskill’s decision to free the Libyan on compassionate grounds on UK-US relations was “damaging but not irreparable” but had “done our reputation for straight dealing a bodyblow”.

He went on: “It was a bad decision taken by the Scottish Government compounded by cowardice from Gordon Brown, who was unwilling to tell us whether he thought it was the right decision or not. On an issue as important as this, for the Prime Minister of the UK not to know what he thinks tells us the story of why we are in the mess we are in today.”

The Somerset MP pointed out that while the legal decision was for Mr MacAskill, he would have thought “since it affected the whole of the UK, there would at least have been a healthy level of discussion between the two” governments.

He added: “But when you have got a Prime Minister who does not know whether it was the right decision or not, then no wonder we ended up with the worst of all possible worlds.”

Dr Fox’s criticism came after his colleague William Hague demanded an apology from David Miliband, the Foreign Secretary, for what he called was a slur against the Conservative Party.

In his speech to the Labour conference, the Foreign Secretary said the Tories’ new alliances in Europe made him feel “sick”, citing Latvia’s For Fatherland and Freedom Party, which, he claimed, commemorated the Latvian Waffen SS.

Mr Hague, his Tory shadow, said Mr Miliband had got his facts wrong and had simply been taken in by Soviet propaganda. He urged him to withdraw his remarks and denounced him for claiming Eric Pickles, the Conservative chairman, who had a record of fighting racism, of defending the Nazis.

This, the Tory deputy leader said, was “contemptible” and added: “I hope you will have the good grace to apologise to him.”