Hugh Davies in Washington reports on the Whitewater trial that has undermined the president's credibility

The trio had been cronies for years. In fact, the president told the trial in videotaped testimony, he first met McDougal three decades ago while they were working for Senator William Fulbright.

McDougal was reputed to have easy access to Mr Clinton's office when he was Arkansas governor. A Washington Post profile claimed that "it seemed the Clintons and McDougals couldn't get enough of each other". McDougal drove a Bentley around town, while his wife advertised property projects on television in hot pants and riding a white horse. At issue in the trial was the evidence of a former member of the Little Rock "good ol' boy" network, a prominent Arkansas Democrat and Clinton supporter named David Hale. He has emerged as the whistle-blower in the scandal.

Mr Hale was so well connected that, when Mr Clinton formed the state's first municipal claims court, he was named its judge.

Mr Hale made the first direct charge against the president, that he had pressed him to make an illegal $300,000 loan to Mrs McDougal in 1986.

Mr Hale offered a plea-bargain deal that he would provide information on the banking practices of the Arkansas elite in return for a light sentence

This loan was one on which a guilty verdict was delivered. It was alleged that Mr Hale and the defendants siphoned federal funds from his lending company. Mr Hale has long implicated Mr Clinton, saying that McDougal urged him to grant the loan to help "clean up" problems involving "the political family".

On July 20, 1993, the day another old comrade of the president, the White House lawyer Vincent Foster, was found shot in a park near Washington, the FBI used a warrant to search Mr Hale's offices. Mr Hale offered a plea-bargain deal that he would provide information on the banking practices of the Arkansas elite in return for a light sentence. He was eventually sentenced to 28 months in prison and ordered to pay a $10,000 fine and $2 million in restitution for his role in the frauds.

Mr Hale was put under a federal witness protection programme for a while. He was seen as a key witness by the Whitewater independent counsel, Kenneth Starr, whose chief deputy, Hickman Ewing, said major efforts had been made to discredit Mr Hale. There had been "no progress" in the Whitewater inquiry until Mr Hale came forward.

The lawyer said: "When one person departs from the inner circle [in a conspiracy], they are going to suffer the wrath of everybody still in it. That's what happening to Mr Hale. He has been attacked, not only by those still on the inside, but by those who would defend the ones on the inside, who presume Mr Hale is making stuff up".

In his evidence, Mr Clinton grew clearly irritated as the prosecutor questioned him on whether he had any involvement in the illegal loan from Mr Hale. He denied this, saying he was not in on any loan discussion. Asked if he knew of any conversations about his name being kept secret, he replied: "Absolutely not."