tornakaden, it seems to me to be a question of chickens and eggs. HMG wanted the British aircraft industry merged into two groups, BAC or HSAL, with HP it seems destined for the latter group. That would seem to me down entirely to the Minister, and if HSAL wanted to make it into a fire sale then it was merely profiting from HMGs edict. Wiki's take (I know, I know..) is:-
one hope of improving sales was to develop the Herald as a military transport. The Royal Air Force had a requirement for 45 tactical transports to replace piston-engined Vickers Valettas, and Handley Page began work in 1960 on the HP.124 to meet this need. This would have a new rear fuselage with a rear loading ramp under the raised tail. The HP.124 was considered favourite to beat Avro's 748 derivative, the Avro 780, with the high wing of the Handley Page expected to give easier loading than the more expensive Avro. While short-field testing of the prototype Herald 200 at RAF Martlesham Heath in 1961 showed off the Herald's good handling and ability to operate from unprepared airstrips, other obstacles were more taxing. The Minister of Aviation, Peter Thorneycroft, refused to sign a contract for the HP.124 unless Handley Page would agree to a merger with British Aircraft Corporation or Hawker Siddeley as part of the government's policy of consolidation of the British aircraft industry. As Hawker Siddeley offered less than half the valuation that Frederick Handley Page placed on the company, the merger did not occur, and the RAF's order went to the Avro 780, which became the Andover. The Herald Series 400 was a simpler tactical transport with a strengthened cabin floor and side loading doors that could be opened in flight for dropping of supplies or paratroops. Eight were built for the Royal Malaysian Air Force.
https://en.wikipedia.org/wiki/Handley_Page_Dart_Herald
HP did themselves no favours by building the HPR3 with piston engines while Fokker used turboprops from the start. The time lost in hanging Darts on the Herald cost them much of the civil market to the F27 and 748, it is true. The design though lent itself well to military development and use, and was the obvious choice for the RAF (given that it was UK produced and the F27 wasn't).
I would suggest that HMGs hands were all over the take it or leave it bid for HP by HSAL, and hence the Andover being foisted on the RAF. The question is, does the same hold true for Homes England, Chalgrove, and MB?