A political storm surrounding the granting of favours to Indian-born billionaire brothers intensified in London yesterday, with press allegations dragging the Prime Minister, Mr Tony Blair, personally into the affair.
The MP, Mr Keith Vaz, was made a minister shortly after the Indian tycoon, Mr Srichand Hinduja, lobbied Mr Blair to give Mr Vaz a job, the Sunday Telegraph reported. Mr Vaz, of Indian origin, is under growing pressure over his involvement with the Hinduja family.
Mr Srichand Hinduja is at the centre of the controversy which led to the resignation of Mr Peter Mandelson from his ministerial post last week - over claims that he had intervened in an application for a British passport by the businessman.
According to the Sunday Telegraph's latest allegation, Mr Hinduja wrote to Mr Blair in spring 1999 complaining that there were no Asian ministers in the British government. Within months Mr Vaz was appointed to a ministerial post, in the Lord Chancellor's Department.
Downing Street insists that all its promotions are made on merit. A spokesman said: "The idea that the Prime Minister would appoint anyone to his government on the basis of a letter from anybody is ridiculous." The spokesman refused to reveal whether Mr Blair had had any correspondence with Mr Hinduja."
Mr Vaz, Minister for Europe in the Labour government, has confirmed that he wrote letters to the Home Office about applications for passports by the billionaire Hinduja brothers.
The Mail on Sunday alleged that Mr Vaz gave insider advice to the brothers about how to fight possible extradition to India to face criminal charges. Three of the four brothers - Srichand, Gopichand and Prakash - are under investigation by the Indian government over kickbacks they allegedly received from Swedish arms manufacturer Bofors to help the firm clinch a $1.3-billion weapons deal in India in 1986.
Mr Vaz has insisted that his dealings with the Hindujas were proper and he has defended his actions as part of his role as a representative of Britain's Asian community. Mr Blair insisted on Friday there were no grounds for Vaz to resign.
Meanwhile, Mr Mandelson has claimed that he was rushed into resigning from the government and had agreed to quit in a moment of personal weakness, according to the Sunday Times. Mr Blair's chief architect of Labour's 1997 general election victory insisted he had not lied about his involvement in the Hinduja passport scandal, and swore to clear his name.
Mr Mandelson resigned as Northern Ireland Secretary on Wednesday after admitting he had telephoned an immigration minister over an application by Mr Srichand Hinduja for British nationality in June 1998. Several weeks after that call, the businessman donated £1 million towards the Millennium Dome. Mr Mandelson was at the time the minister in charge of the Dome.
Mr Mandelson wrote in the Sunday Times: "I am not a liar. I did not lie. What I did do was make the mistake of speaking out before establishing all the facts and rushing into last-minute interviews."
He added: "This relatively trivial error was turned into a huge misjudgement that led to my resignation."
Mr Mandelson said that his meeting with Mr Blair on Wednesday had been taken under pressure of time, as a regular morning media briefing drew nearer. He recalled: "For the first time and I hope the last time in my life, the fight suddenly went out of me. I felt isolated. I knew I hadn't done anything wrong but I had no time to prove it."
Mr Mandelson's first detailed account of his role coincided with reports yesterday that Mr Blair was ruthlessly distancing himself from the friend who was his closest adviser.
"Number 10 puts knife into `detached' Mandelson," the Independent on Sunday headlined its report about what it called an "extraordinary" briefing to reporters by Mr Blair's spokesman, Mr Alistair Campbell.
Mr Campbell, often described as a power behind Mr Blair's throne, issued a statement saying he had not "knifed" Mr Mandelson and that Mr Mandelson attended a party at his home on Saturday night.
"There is a tremendous question mark hanging over the character of this government," the shadow home secretary, Ms Anne Widdecombe, said. She added that the inquiry ordered by Mr Blair must answer why Mr Hinduja was granted a passport in 1998 after being turned down eight years earlier and why his new application was processed in six months instead of the normal 18 months.
According to a poll in the Mail on Sunday, 54 per cent of British voters see Mr Blair's administration as just as "sleazy" as the preceding Conservative government. The passport scandal has also damaged Mr Blair's standing in the eyes of 63 per cent of voters, the poll found.