Dr Fox has been accused of breaking ministerial code by allowing Adam Werritty, a close friend who was the minister’s best man, to accompany him on an official visit to Sri Lanka.
The defence secretary told parliament last month that Werritty, who has distributed business cards describing himself as Dr Fox’s personal adviser, had met him 14 times in 16 months but had not travelled with him on any official overseas visits.
The MoD has since admitted Werritty met Fox during the visit, but said it was in a personal capacity.
A photograph of Fox arriving to give the address on 9 July shows Werritty in the background, following closely behind Sri Lankan government ministers and the British high commissioner, John Rankin.
Dr Fox’s permanent secretary at the Ministry of Defence, Ursula Brennan, has been asked by Dr Fox to investigate the allegation that the meeting in Sri Lanka – and another in Dubai on August 19 – had compromised national security.
But The Guardian newspaper claims that Ms Brennan had previously raised concerns about whether the friendship had strayed into official government business.
Mr Werritty, 34, has been a close friend of Mr Fox, 50, for the last 14 years.
They lived together in a flat near Tower Bridge before the defence secretary married Jesme Baird in 2005.
Whilst Mr Fox was shadow health secretary between 1999 and 2003, Mr Werritty was appointed director of UK Health Ltd, heading the company for the next two years.
In November 2006 Mr Werritty was appointed director of Security Futures Ltd, a year after Mr Fox became shadow defence secretary.
Channel 4 News has learned from abbreviated accounts that the company made a loss of just over £4000 in 2007, a profit of just under £6000 in 2008, with the company’s estimated total losses in 2008 standing at just over £93,000.
In the same year, 2008, the company gave £10 000 in a charitable donation to The Atlantic Bridge, an Atlanticist former charity set up by Dr Liam Fox.
Fox installed Werritty as the executive director and sole employee of the charity in 1997.