Mr Neil Hamilton, the former Tory minister at the heart of the cash-for-questions scandal, was declared bankrupt yesterday.
The judgement brings to an end years of legal action and clears the former Tory high flyer, who lost his seat in the 1997 general election to BBC reporter Martin Bell, of debts estimated at £3 million.
Mr Hamilton will be a bankrupt for three years unless his creditors agree to a shorter period. He is expected to be forced to sell his £1 million home in Cheshire.
Mr Hamilton's downfall started when he sued the Harrods owner, Mr Mohammed al-Fayed, for libel over accusations that he took money for asking questions in parliament. He lost the case in December 1999 and the subsequent appeal a year later.
Mr Hamilton vowed to take his case to the European Court of Human Rights after appearing before Macclesfield County Court in Cheshire for the bankruptcy petition brought by the Harrods owner.
Mr Hamilton owes Mr al-Fayed £1.5 million as a result of his disastrous libel suit.
Outside the court Mr Hamilton said: "I am here for two reasons. Firstly Fayed, my sole creditor, issued a petition for my bankruptcy as an act of revenge knowing he would get nothing out of it. Secondly, the Court of Appeal failed to protect my right to a fair trial."
Mr Hamilton said the Court of Appeal had refused to penalise Mr al-Fayed by quashing the cost order despite hearing evidence that he had access to stolen documents. Mr al-Fayed denied any knowledge of the documents.
Mr Hamilton added: "I have not been able to find justice in England. I now intend to take the case to the European Court of Human Rights."