controversial remarks picked up by his House of Assembly microphone.

Mr. Smith said "I'm sorry'' to the chief target of his private tongue-lashing -- Government backbencher Mr. Trevor Moniz.

But yesterday Mr. Moniz signalled the rookie Paget West MP was still floundering in political hot water.

"It appears to be a sincere apology, but it's not end of the matter. This has far-reaching consequences.'' Meanwhile, Premier Dr. David Saul, who is in Hong Kong, has been told of the controversy by party colleagues, and is expected to deliver a statement shortly.

Mr. Smith, also Minister of Planning and Natural Resources, has faced fierce pressure to resign over the off the cuff comments made while he thought his mike was switched off.

Shocked radio listeners heard him labelling United Bermuda Party rebels "wicked'' and a "nasty bunch''.

And he also took a potshot at Mr. Moniz, saying the Smith's South MP had lodged a planning appeal over an "illegal'' house.

Mr. Smith, chatting to former Cabinet Minister Mr. John Irving Pearman, said he had not looked at the appeal.

"I haven't even looked at it. I said I ain't looking at it for now. The naughty b*****.

"He built it anyway. Couldn't care less. They're a law unto themselves.'' The remarks were made after Friday's election of Opposition MP Mr. Stanley Lowe as Deputy Speaker.

Mr. Smith was outraged after five Government MPs, including Mr. Moniz, stayed away from the House and helped Mr. Lowe's election bid.

As news of Mr. Smith's political gaffe spread, he sent a letter the following day to Mr. Moniz.

Although addressed to Moniz's Smith's home, it was dropped off at his Hamilton law firm.

Dated November 11, it said: "Since I was not able to contact you by phone prior to my departure to London today, I thought I'd leave you this note.

"In the House yesterday I was careless with my words and, little did I know, a private conversation was being picked up by a microphone.

"Immediately following the vote for Deputy Speaker -- I believe it was at this time -- I became quite emotional, obviously due to the unexpected outcome of the vote.

"Undoubtedly, my choice of words was poor and grossly inappropriate considering the Chamber site.

"Further, again in the heat of the moment my reference to you by name was unfair.

"Please accept my personal apologies for any embarrassment caused and, indeed, for any offence caused.

"You are a colleague of mine and my remarks were simply improper.'' The letter was released to the media yesterday by Acting Premier Jerome Dill.

Said Mr. Dill: "I have been in contact with the Premier by telephone. He is giving the matter serious consideration.

"Ultimately what happens is a matter for the Premier. I anticipate that a further statement will be forthcoming in due course.'' Mr. Smith has been strongly criticised by fellow UBP backbenchers Dr. David Dyer and Dr. Clarence Terceira.

They point out Mr. Smith had to act as a judge when dealing with planning appeals.

Smith apoligises for remarks about fellow MP He had now thrown his impartiality into doubt by his remarks.

Said Dr. Dyer: "Listening to his remarks there appears to be almost a personal thing here, which is directed at Trevor Moniz.

"There seems to be a deliberate delay of the normal appeals process.'' He added: "I would have thought the right and proper thing for someone who has done this and made a major error ... is to tender his resignation and publicly apologise.'' Opposition Leader Mr. Frederick Wade has also called on Mr. Smith to quit, and apologise.

"He has demonstrated by his remarks his inability to honour the secret trust given to him as a Minister. There is no room for that kind of behaviour.'' Environmental groups, however, like Save Open Spaces, yesterday preferred to stay out of the controversy.

Mr. Pearman, meanwhile, said he could only remember aspects of his conversation with Mr. Smith.

"I wasn't focussing totally on it,'' he said.

Mr. Pearman said he felt sorry for Mr. Smith, believing him a victim of the so-called "gang of five'' UBP rebels.

Mr. Moniz said he read Mr. Smith's letter yesterday morning.

"He has given me a personal apology, and I accept it as a sincere apology.

"However, I'm not upset by Mr. Smith calling me names -- I'm upset by the improper activities of him as a Minister.

"Is this the image the UBP wants to convey? That we are dealing with planning appeals in a cavalier fashion, and discussing them with other people? I am deeply concerned by this. What message does it send the public? The mind boggles.'' Mr. Moniz said he had appealed after planners ruled one facade of his home was three storeys -- not two.

"My appeal was meant to have been dealt with within seven to 10 days. It now becomes clear why it wasn't.

"To me the Government should be seen to be squeaky clean, presumably the Premier wants to send an image of being above board.'' Mr. Moniz said there were four points he wanted to focus on over Mr. Smith's letter.

"My first complaint is that the language used by Mr. Smith was insulting, but a personal apology would suffice for that.

"One gets thick-skinned in politics, and I'm perfectly happy with a formal apology which he should issue in the House of Assembly.

"The second point, in my view, is that what he said was a gross distortion of the truth.

"His claim that I had an illegal house, and that some of us in the UBP were a law unto ourselves, is untrue.

"And his letter of apology doesn't indicate that. His letter doesn't say his allegations were untrue.

"Thirdly, what he said was a breach of confidentiality. It's a breach of confidence even to tell Mr. Pearman about the planning appeal, and his letter hasn't addressed that issue.

"For a Minister to be discussing my planning appeal with a private individual is totally inappropriate.

"And fourthly there was a clear indication of bias, in the sense he was judging me, assuming I was wrong in the appeal.'' He added: "While his apology suffices for the first point, it does not for the other points.

"On the broader issue it doesn't seem to me that Tim appreciates the gravity of what he has said. Justice must be done, and seen to be done. This is a very serious matter for me personally, for our party and for Bermuda.''