By Avril Ormsby
LONDON (Reuters) - The fate of Britain's Defense Secretary Liam Fox may be decided next week after claims his relationship with a close friend and unofficial adviser may have breached national security.
The role of defense secretary is particularly sensitive in Britain because of the involvement of about 10,000 British troops in Afghanistan and its role in helping NATO protect civilians in Libya after the uprising against Muammar Gaddafi.
Fox returned to Britain on Sunday from Libya where his first visit to the country was overshadowed by the saga.
Prime Minister David Cameron has demanded the initial findings of an inquiry arrive on his desk on Monday after media furor surrounding his minister's ties with a former flatmate and best man at his wedding, Adam Werritty, refused to go away.
Although Cameron has said he has "full confidence" in Fox, the 48-hour deadline was shorter than the two-week deadline Fox gave a top military civil servant to carry it out.
One defense analyst said Fox, who has been defense secretary since the Conservative-led coalition came to power in 2010, would fight to keep his job, saying Fox's behavior was more a case of poor judgment than a risk to national security.
But the opposition is calling for a wider inquiry, and will push for Fox to make an emergency statement to parliament on Monday, where he is already due to answer defense questions.
"I mean it's not just the questions of national security and access to highly sensitive information. It's also the question of the probity and procurement," Harriet Harman, deputy Labour leader, told BBC television on Sunday.
"But there's now a further question about Dr Fox's integrity and the question of whether he actually answered truthfully and fully all the questions that have been put."
Fox, on the right of Cameron's Conservatives and seen as a leadership challenger, is skeptical on Europe and in favor of close cooperation with the United States on defense issues.
His departure would leave Cameron searching for someone of similar political leanings to avoid accusations that his coalition with the Liberal Democrats was getting dragged too far into the center ground of British politics.
Werritty's 14 visits to the ministry in the past 16 months, without security clearance and despite not being on its payroll, are being questioned as well as whether he accompanied Fox on official overseas trips, and set up business meetings, including one in Dubai in June, where ministry officials were not present.
Although Werritty is not part of Fox's team of officials, he is reported to have handed out embossed cards describing himself as "adviser" to the minister.
In Misrata, Fox told Reuters, when asked if the coverage was overshadowing his role as defense secretary: "Well, of course, that's what those who raised the stories intended and they're allowed to do that in a democratic society."
He described the claims as "utterly baseless."
Fox, who stood against Cameron for party leadership in 2005, came into conflict with him again last year as leaks emerged when his department successfully fought deep budget cuts.
Fox's status among defense chiefs took a dent though when he blamed them for overspending, but he won plaudits in other circles for cleaning up the department's finances.
A retired senior military official, who declined to be named said: "If there is any real substance to this story, that may undermine his position, but so far, I'm not convinced there is.
"Every minister's got mates who he deals with, who they use as their confidantes."
Defense analyst Paul Beaver said: "We will look back at his tenure as defense secretary in a decade's time and will remember what was a very successful campaign (Libya).
"He is a fighter, I think he firmly believes he has done nothing of a resignation issue."
(Additional reporting by Mohammed Abbas; Editing by Louise Ireland)