The Labour Party was fighting new sleaze allegations yesterday which prompted the Trade and Industry Secretary, Mr Stephen Byers, to threaten legal action over a newspaper article.
As Downing Street continued to defend the Europe minister, Mr Keith Vaz, over calls for a second investigation into his financial affairs, insisting he was doing "a good job", Mr Byers served notice he was seeking legal advice over an article in the Daily Mail. The article suggested he "buried" an official report into allegations that the former Paymaster General, Mr Geoffrey Robinson, lied about a £200,000 donation from the newspaper tycoon, Mr Robert Maxwell. The Prime Minister's official spokesman said Mr Byers would be seeking an apology from the Daily Mail and a donation to charity. "Newspapers can peddle their smears, but every now and again facts should be allowed to get in the way," he added. And a spokesman for Mr Byers said: "He is consulting his lawyers and I think the Daily Mail can expect contact very soon."
The source of Labour's embarrassment is "The Paymaster", a biography of Mr Robinson written by investigative journalist Tom Bower which is being serialised in the Daily Mail. Mr Robinson has always denied receiving the money in 1990 in return for running one of Maxwell's companies and the Parliamentary Standards and Privileges Committee cleared him of wrongdoing. But yesterday's article claimed that Mr Bower had documentary evidence to prove the payment was made. The newspaper alleged that before Mr Robinson resigned, following the Mandelson home loan affair, Mr Byers suppressed a Trade and Industry department report into the alleged Maxwell payment.
The Department of Trade and Industry countered the allegations declaring that, acting on the advice of the permanent secretary, civil servants rather than Mr Byers were involved in the January 1999 internal inquiry into Mr Robinson's financial dealings. "The Secretary of State accepted that advice. Later that month a wide-ranging investigation was launched," the spokesman said. "In December, a decision was taken by officials that no further action should be taken." Officials said that under the Companies Act the report could not be published because it was commercially sensitive.
The Daily Mail insisted it would stand by the article in court and the Shadow Trade and Industry Secretary, Mr David Heathcoat-Amory, said the government was trying to "keep a lid on a scandal".
The difficulties for Mr Byers came as Mr Vaz faced the prospect of a second parliamentary investigation into his business dealings. The Conservatives said they wanted the Commissioner for Standards, Mrs Elizabeth Filkin, to look into allegations that the minister failed to inform the original inquiry of a financial link with the Hinduja brothers. It was alleged that the Hinduja Foundation paid over £1,000 to Mapesbury Communications, a company set up by the Vaz family, in relation to a visit to the Commons by a religious leader.