In a surprise move, Downing Street also strongly denied reports that Prime Minister Tony Blair had been repeatedly warned about Mr Davies' private life.

Donald Fearon has been remanded in custody

Mr Davies quit his ministerial post on Tuesday after a late night incident on Clapham Common in south London on Monday ended with the theft of his car.

Mr Davies denied that the incident had anything to do with drugs or gay sex - the area around Clapham Common is a known meeting place for homosexual men.

His resignation from the Cabinet - and the reasons he gave - have provoked intense media interest.

The Observer leads its front page with a story headlined: "Davies attack story unravels."

The Observer's Martin Bright discusses the paper's coverage with Richard Dallyn

Correspondent Martin Bright said: "It seems that the idea that this was a 'moment of madness' is looking like it doesn't hold water at all."

The paper says he spent several hours with a man alleged to have robbed him later.

The Sunday Times reports that Mr Davies only decided to resign after one of his attackers telephoned the following morning to try to extort more money.

In a statement on Saturday night, Mr Davies, Labour MP for Caerphilly, said: "The lurid unpleasant lies and fantasies masquerading as stories in some of the newspapers sicken me.

"They are unfounded and wholly untrue. It's vicious and hurtful rubbish.

"The only relationship that matters to me is the stable and loving marriage I have with my wife.

'Fabricated fantasies'

Daniela Relph: "Mr Davies urges people not to judge him on fabricated fantasies"

"Everybody has a fundamental right to a private life. I am no exception.

"The fact that I have acknowledged a serious lapse of judgement in a particular situation is not an excuse for the media to pay money to any liar who comes along and claims to know me.

"Journalists with vivid imaginations have been flashing cheque books and presenting fiction as fact as part of a campaign to destroy me.

"I refuse to respond to the detail of this complete nonsense and urge people to judge me on what I have done in office and not on the fabricated fantasies of the vicious and corrosive press."

No warning

A spokesman for Mr Blair attempted on Saturday to quash rumours that the prime minister knew aspects of Mr Davies' private life were potentially damaging.

"There is no truth whatsoever in reports that the prime minister had been warned in the past about Ron Davies.

"The prime minister was at no time ever given any warning about anything about Ron Davies," he said.

A 38-year-old unemployed man, Donald Fearon, appeared on Saturday before Camberwell Green Magistrates Court in connection with the theft of the former minister's car.

He was charged with robbery of Mr Davies' Ford Granada car and its contents in Dray Gardens, Brixton, south London, on Monday night.