Probe May Hurt Rising Tory Politician : Britain: Novelist Jeffrey Archer is linked to insider trading. He denies allegations.

The political fate of Jeffrey Archer, a prominent Conservative Party figure and best-selling novelist, was cast into uncertainty Friday when it was revealed that he is under investigation on allegations of insider trading.

Archer is considered a front-runner to become Tory chairman in Prime Minister John Major’s expected Cabinet reshuffle this summer; he has been the leading choice of many party rank and file.

But the Trade and Industry Department broke with its policy of secrecy in such matters to confirm that Archer, among others, is the subject of an investigation into share-dealing in Anglia Television.

The multimillionaire author and politician has strongly denied any wrongdoing, and political observers speculated that the leak about the inquiry was intended to deny Archer the party chairman post he desires.

His friend Lord Parkinson, a former Conservative Party chairman and Cabinet member, declared Friday: “It would be very difficult to promote him into a job with this hanging over him. Certainly the timing could not have been worse from Jeffrey’s point of view.”

Archer, a 54-year-old former member of Parliament, is one of the few leading Conservatives close to both Major and former Prime Minister Margaret Thatcher. He combines book-signing appearances around Britain with plugs for Conservative Party candidates. His last book, “Honor Among Thieves,” was an international bestseller. His current work, “Twelve Red Herrings,” has just hit the booksellers.

“Everyone knows what a terrific job he has done running around the country raising masses of money for the Conservative Party,” said Parkinson, “and everyone will be hoping this will just go away and prove to be entirely without basis.”

Trade and Industry Department inspectors are scrutinizing the January share purchases in Anglia Television, which occurred about the time the company agreed to a takeover bid by MAI, a television combine. Archer’s wife, Dr. Mary Archer, was then a member of the board of directors of Anglia Television and had been since 1987.

Anglia Television accepted a $438-million takeover bid from MAI on Jan. 18. Its shares jumped 180 pence ($2.70) to 664 pence ($9.96) and MAI shares gained 10%.

“It is completely untrue,” Archer said, denying he had done anything illegal. “I did not buy any shares.”

But the Evening Standard reported Friday that Archer’s wife had held shares in Anglia Television in her name and in a “nominee” account. The newspaper said investigators were scrutinizing an Anglia stock transaction this year with a $75,000 profit in which the Archers may have been involved.

The Trade and Industry Department defended its decision to make public the existence of the Archer inquiry, saying the information had already been leaked by television companies.

Michael Heseltine, the department’s Cabinet minister, said he is waiting to receive a report from independent investigators before deciding if further action is warranted. Observers said he could, for example, launch a criminal prosecution under laws prohibiting insider trading.