CLINTON AFFAIR 'SEEN BY SECRET WITNESS'; AS AMERICA'S FIRST LADY PREPARES TO TAKE ON HER HUSBAND'S CRITICS, PRESIDENT FACES NEW CLAIMS THAT MAY DRIVE HIM FROM THE WHITE HOUSEBehind the smile, the panic sets in.

Byline: NICK HOPKINS

BILL CLINTON was caught in an intimate encounter with his young lover at the White House, it was claimed last night.

The bombshell report on ABC TV implies that an independent witness can substantiate claims of a Presidential affair with 24-year-old Monica Lewinsky.

There was no indication whether the witness was from the Secret Service or the White House staff. But the revelation, if true, is extremely bad news for both parties.

Eyewitness evidence would shoot down all denials by the Clinton camp. It would also torpedo Lewinsky's bid to avoid prosecution for perjury if she goes back on an earlier sworn statement that there was no affair.

Some Washington observers suggested that her only hope of making a deal with special prosecutor Kenneth Starr would be to admit that Clinton told her to lie on oath about their affair.

Such a charge would lead almost inevitably to his impeachment or resignation.

The ABC report came amid a welter of lurid new accusations against Clinton, including one that he had admitted 'hundreds' of affairs.

Some senior Democrats talked openly of the prospect of him resigning, and there were reports that White House aides believe he should postpone tomorrow night's State of the Union address to the nation.

International policy is also being affected.

Clinton must decide soon how to react to Iraq's defiance over weapons inspections.

But he knows that if he launches a military strike he will be accused of trying to divert attention from his personal problems.

Hillary Clinton was said to have taken a leading role in his defence campaign as polls showed public support plunging.

She was credited with a change of tactics which saw his allies adopt a far more aggressive approach and launch a media blitz.

There were suggestions that Clinton might admit an 'emotional relationship' with Lewinsky because they had both suffered turbulent childhoods.

But the emergence of a new witness would destroy any such idea.

The compromising encounter between Clinton and Lewinsky is alleged to have happened in the spring of 1996. It was in a private area of the White House, where Lewinsky was working as an unpaid trainee.

Lewinsky's denial of an 18-month affair came in a sworn statement to lawyers representing Paula Jones, who has accused Clinton of sexual harassment.

She is now alleged to have told a friend that Clinton admitted he could not settle the Jones case because it would 'open the flood gates.' On secretly recorded tapes, she recalled a conversation with Clinton during a visit to the Oval Office.

According to sources, Lewinsky said: 'Why don't you just settle and give Jones some cash and the apology she wanted?' Clinton said: 'I can't. Lewinsky asked: 'Why not?' Clinton: 'Because they'll all come forward.' Lewinsky: 'How many could there be?' Clinton, sighing: 'Hundreds.' Lewinsky's lawyer Bill Ginsburg was yesterday continuing negotations with Starr over a possible deal.

Ginsburg said she was 'dying to tell the story' but said of the rumoured new witness: 'If they have solid evidence I suppose they're not going to be offering imunity.' If Lewinsky decides to confess to an affair, Clinton is in desperate straits.

He and his friend and adviser Vernon Jordan, who are both said to have asked her to lie about an affair, would be left open to charges of obstructing justice and encouraging perjury.

Leon Panetta, Clinton's former White House chief of staff, said yesterday resignation was now a pos-siblity.

He said: 'If these are baseless charges, it'll be okay. On the other hand, if there's something there it would be better for Democrats under those circumstances if Al Gore became president and you had a new message and new individual up there. The worst scenario

is if there's substance to it and it drags on.' Yesterday the Clintons went to church in Washington as usual, refusing to answer questions about the scandal.

Last night the President was said to be watching the Superbowl football championship on TV and he has no scheduled public appearances today.

Cancellation of the State of the Union address, the annual setpiece speech to Congress and the country, would be unprecedented in modern times.

But some aides believe Clinton could not credibly speak to the nation without mentioning the scandal - yet doing so would ruin the dignity of the occasion.

There were clear signs that the Clintons are preparing to dig in and fight the accusations.

Hillary will appear on two morning TV programmes this week and is bound to be asked about the crisis.

Clinton supporters have also clearly been given the green light to start defending him aggressively in public.

His former campaign manager James Carville warned yesterday: 'There's going to be a war. The friends of the president are disgusted by these kinds of tactics.

We're going to fight and we're going to fight very hard. The president emphatically denies it. He has denied it to staff, he has denied to the news media, he has denied it to the American people and he's denied to his Cabinet and denied to his friends.

'I can't get any more emphatic about that.' If Lewinsky does turn against the President, Carville and others are likely to portray her as a fantasist with a record of dishonesty, who simply invented the affair.

CLINTON AFFAIR 'SEEN BY SECRET WITNESS'; AS AMERICA'S FIRST LADY PREPARES TO TAKE ON HER HUSBAND'S CRITICS, PRESIDENT FACES NEW CLAIMS THAT MAY DRIVE HIM FROM THE WHITE HOUSEBehind the smile, the panic sets in.

Byline: NICK HOPKINS

BILL CLINTON was caught in an intimate encounter with his young lover at the White House, it was claimed last night.

The bombshell report on ABC TV implies that an independent witness can substantiate claims of a Presidential affair with 24-year-old Monica Lewinsky.

There was no indication whether the witness was from the Secret Service or the White House staff. But the revelation, if true, is extremely bad news for both parties.

Eyewitness evidence would shoot down all denials by the Clinton camp. It would also torpedo Lewinsky's bid to avoid prosecution for perjury if she goes back on an earlier sworn statement that there was no affair.

Some Washington observers suggested that her only hope of making a deal with special prosecutor Kenneth Starr would be to admit that Clinton told her to lie on oath about their affair.

Such a charge would lead almost inevitably to his impeachment or resignation.

The ABC report came amid a welter of lurid new accusations against Clinton, including one that he had admitted 'hundreds' of affairs.

Some senior Democrats talked openly of the prospect of him resigning, and there were reports that White House aides believe he should postpone tomorrow night's State of the Union address to the nation.

International policy is also being affected.

Clinton must decide soon how to react to Iraq's defiance over weapons inspections.

But he knows that if he launches a military strike he will be accused of trying to divert attention from his personal problems.

Hillary Clinton was said to have taken a leading role in his defence campaign as polls showed public support plunging.

She was credited with a change of tactics which saw his allies adopt a far more aggressive approach and launch a media blitz.

There were suggestions that Clinton might admit an 'emotional relationship' with Lewinsky because they had both suffered turbulent childhoods.

But the emergence of a new witness would destroy any such idea.

The compromising encounter between Clinton and Lewinsky is alleged to have happened in the spring of 1996. It was in a private area of the White House, where Lewinsky was working as an unpaid trainee.

Lewinsky's denial of an 18-month affair came in a sworn statement to lawyers representing Paula Jones, who has accused Clinton of sexual harassment.

She is now alleged to have told a friend that Clinton admitted he could not settle the Jones case because it would 'open the flood gates.' On secretly recorded tapes, she recalled a conversation with Clinton during a visit to the Oval Office.

According to sources, Lewinsky said: 'Why don't you just settle and give Jones some cash and the apology she wanted?' Clinton said: 'I can't. Lewinsky asked: 'Why not?' Clinton: 'Because they'll all come forward.' Lewinsky: 'How many could there be?' Clinton, sighing: 'Hundreds.' Lewinsky's lawyer Bill Ginsburg was yesterday continuing negotations with Starr over a possible deal.

Ginsburg said she was 'dying to tell the story' but said of the rumoured new witness: 'If they have solid evidence I suppose they're not going to be offering imunity.' If Lewinsky decides to confess to an affair, Clinton is in desperate straits.

He and his friend and adviser Vernon Jordan, who are both said to have asked her to lie about an affair, would be left open to charges of obstructing justice and encouraging perjury.

Leon Panetta, Clinton's former White House chief of staff, said yesterday resignation was now a pos-siblity.

He said: 'If these are baseless charges, it'll be okay. On the other hand, if there's something there it would be better for Democrats under those circumstances if Al Gore became president and you had a new message and new individual up there. The worst scenario

is if there's substance to it and it drags on.' Yesterday the Clintons went to church in Washington as usual, refusing to answer questions about the scandal.

Last night the President was said to be watching the Superbowl football championship on TV and he has no scheduled public appearances today.

Cancellation of the State of the Union address, the annual setpiece speech to Congress and the country, would be unprecedented in modern times.

But some aides believe Clinton could not credibly speak to the nation without mentioning the scandal - yet doing so would ruin the dignity of the occasion.

There were clear signs that the Clintons are preparing to dig in and fight the accusations.

Hillary will appear on two morning TV programmes this week and is bound to be asked about the crisis.

Clinton supporters have also clearly been given the green light to start defending him aggressively in public.

His former campaign manager James Carville warned yesterday: 'There's going to be a war. The friends of the president are disgusted by these kinds of tactics.

We're going to fight and we're going to fight very hard. The president emphatically denies it. He has denied it to staff, he has denied to the news media, he has denied it to the American people and he's denied to his Cabinet and denied to his friends.

'I can't get any more emphatic about that.' If Lewinsky does turn against the President, Carville and others are likely to portray her as a fantasist with a record of dishonesty, who simply invented the affair.

CLINTON AFFAIR 'SEEN BY SECRET WITNESS'; AS AMERICA'S FIRST LADY PREPARES TO TAKE ON HER HUSBAND'S CRITICS, PRESIDENT FACES NEW CLAIMS THAT MAY DRIVE HIM FROM THE WHITE HOUSEBehind the smile, the panic sets in.

Byline: NICK HOPKINS

BILL CLINTON was caught in an intimate encounter with his young lover at the White House, it was claimed last night.

The bombshell report on ABC TV implies that an independent witness can substantiate claims of a Presidential affair with 24-year-old Monica Lewinsky.

There was no indication whether the witness was from the Secret Service or the White House staff. But the revelation, if true, is extremely bad news for both parties.

Eyewitness evidence would shoot down all denials by the Clinton camp. It would also torpedo Lewinsky's bid to avoid prosecution for perjury if she goes back on an earlier sworn statement that there was no affair.

Some Washington observers suggested that her only hope of making a deal with special prosecutor Kenneth Starr would be to admit that Clinton told her to lie on oath about their affair.

Such a charge would lead almost inevitably to his impeachment or resignation.

The ABC report came amid a welter of lurid new accusations against Clinton, including one that he had admitted 'hundreds' of affairs.

Some senior Democrats talked openly of the prospect of him resigning, and there were reports that White House aides believe he should postpone tomorrow night's State of the Union address to the nation.

International policy is also being affected.

Clinton must decide soon how to react to Iraq's defiance over weapons inspections.

But he knows that if he launches a military strike he will be accused of trying to divert attention from his personal problems.

Hillary Clinton was said to have taken a leading role in his defence campaign as polls showed public support plunging.

She was credited with a change of tactics which saw his allies adopt a far more aggressive approach and launch a media blitz.

There were suggestions that Clinton might admit an 'emotional relationship' with Lewinsky because they had both suffered turbulent childhoods.

But the emergence of a new witness would destroy any such idea.

The compromising encounter between Clinton and Lewinsky is alleged to have happened in the spring of 1996. It was in a private area of the White House, where Lewinsky was working as an unpaid trainee.

Lewinsky's denial of an 18-month affair came in a sworn statement to lawyers representing Paula Jones, who has accused Clinton of sexual harassment.

She is now alleged to have told a friend that Clinton admitted he could not settle the Jones case because it would 'open the flood gates.' On secretly recorded tapes, she recalled a conversation with Clinton during a visit to the Oval Office.

According to sources, Lewinsky said: 'Why don't you just settle and give Jones some cash and the apology she wanted?' Clinton said: 'I can't. Lewinsky asked: 'Why not?' Clinton: 'Because they'll all come forward.' Lewinsky: 'How many could there be?' Clinton, sighing: 'Hundreds.' Lewinsky's lawyer Bill Ginsburg was yesterday continuing negotations with Starr over a possible deal.

Ginsburg said she was 'dying to tell the story' but said of the rumoured new witness: 'If they have solid evidence I suppose they're not going to be offering imunity.' If Lewinsky decides to confess to an affair, Clinton is in desperate straits.

He and his friend and adviser Vernon Jordan, who are both said to have asked her to lie about an affair, would be left open to charges of obstructing justice and encouraging perjury.

Leon Panetta, Clinton's former White House chief of staff, said yesterday resignation was now a pos-siblity.

He said: 'If these are baseless charges, it'll be okay. On the other hand, if there's something there it would be better for Democrats under those circumstances if Al Gore became president and you had a new message and new individual up there. The worst scenario

is if there's substance to it and it drags on.' Yesterday the Clintons went to church in Washington as usual, refusing to answer questions about the scandal.

Last night the President was said to be watching the Superbowl football championship on TV and he has no scheduled public appearances today.

Cancellation of the State of the Union address, the annual setpiece speech to Congress and the country, would be unprecedented in modern times.

But some aides believe Clinton could not credibly speak to the nation without mentioning the scandal - yet doing so would ruin the dignity of the occasion.

There were clear signs that the Clintons are preparing to dig in and fight the accusations.

Hillary will appear on two morning TV programmes this week and is bound to be asked about the crisis.

Clinton supporters have also clearly been given the green light to start defending him aggressively in public.

His former campaign manager James Carville warned yesterday: 'There's going to be a war. The friends of the president are disgusted by these kinds of tactics.

We're going to fight and we're going to fight very hard. The president emphatically denies it. He has denied it to staff, he has denied to the news media, he has denied it to the American people and he's denied to his Cabinet and denied to his friends.

'I can't get any more emphatic about that.' If Lewinsky does turn against the President, Carville and others are likely to portray her as a fantasist with a record of dishonesty, who simply invented the affair.