The pounds 227m bid between the second and third largest tour operators in the UK escaped a reference to the Monopolies and Mergers Commission on Wednesday.
The decision, against advice by the Office of Fair Trading, baffled pressure groups and MPs, concerned about the effects on consumer choice.
Seventeen Labour MPs yesterday put their names to an early day motion on the conduct of Neil Hamilton, Under-Secretary for Corporate Affairs.
The motion, laid down by Ken Purchase, who chairs Labour's DTI backbench committee, reads: 'This House notes with concern the decision by the Secretary of State for Trade and Industry to clear Airtours' bid for Owners Abroad despite the recommendation of the Director-General of Fair Trading.'
It also notes 'that the chairman of Airtours, David Crossland, is a prominent constituent of the Minister for Corporate Affairs (and) understands the minister was aware of this some time ago, contrary to claims made by officials in his Department'.
It 'notes that the minister did not publicly declare his interest and was still involved in consideration of the bid as recently as 15 February before relinquishing responsibility to the Secretary of State, and therefore calls for a full inquiry to clarify the role of the minister in this affair'.
Mr Hamilton, Conservative MP for Tatton, Cheshire, denies he knew Mr Crossland was a constituent both before and during the early stages of the bid.
A spokeswoman at the DTI said: 'He didn't actually know until he received correspondence from Mr Crossland.'
Airtours yesterday confirmed that it wrote to Mr Hamilton on 14 January. A company spokesman declined to divulge the full content of the letter, but said it alerted Mr Hamilton that Mr Crossland was a constituent.
In a separate development, Henry Bellingham, Conservative MP for North-west Norfolk, has tabled a question asking Mr Heseltine what pre-bid guidance he was given by the OFT and the importance of such advice in deciding whether to refer a bid.
Airtours was confident of escaping a referral from the outset, saying it had made 'exhaustive inquiries'. It was understood when the bid was made that the OFT had given Airtours non-binding confidential guidance.
With yesterday's political manoeuvres, Owners mounted a fresh attack against Airtours by promising, in the absence of unforeseen circumstances, to boost dividend payments for the 1992/3 financial year by 43 per cent to 5p.
The City still believes Airtours will have to increase its offer. Owners closed unchanged at 131p - 16p above the value of Airtours' three-for-eight share swap terms.Reuse content