Empire in Whitehall costs a king's ransom

Deputy Prime Minister: Enormous expenditure on Michael Heseltine's new Government department comes under attack

Michael Heseltine yesterday shrugged off attacks on the estimated pounds 495,000 he is costing the taxpayer.

Self-doubt is not a recognised trait of the First Secretary to the Treasury and Deputy Prime Minister, who now occupies one of the largest offices in Whitehall, dubbed 10A Downing Street.

He has taken unprecedented powers in running the Whitehall machine from the 872 sq ft suite of rooms he has commandeered at the Cabinet Office.

And he can control the whole machine on the "Hezzanet" - a pounds 150,000 information technology system linking his desk to the desks of every other minister in the Government.

The electronic system allows the Deputy Prime Minister to notify every minister in Whitehall of his orders for the day. He can look into every one of his colleagues' ministerial diaries, and log on to the departmental diaries, in an attempt to ensure that the Government is singing the same tune.

With the Prime Minister attending the Commonwealth Heads of Government Conference in New Zealand, the Deputy Prime Minister's own diary for next week underlines his seniority in the Government. He has his own session of Question Time on Monday, before appearing again on Tuesday to answer Prime Minister's Questions for John Major.

On Saturday, he is likely to represent the Government for the Prime Minister at the Remembrance Concert at the Royal Albert Hall and on Remembrance Sunday he will again deputise for Mr Major, laying the Government's wreath at the Cenotaph.

The next day, he is due to go into a private clinic for an operation to remove a kidney stone. After his heart attack in Italy, there were doubts that he would come back to office, but he has bounced back, giving the Tory party conference in Blackpool a pantomime performance to remember.

He is no longer seen as a threat to Mr Major - in spite of continued speculation about the deal struck after the July leadership contest - but he has his fingers in every Whitehall pie. If Mr Major fell under the proverbial bus, Mr Heseltine would effortlessly move next door.

His treatment of his Cabinet deputy, Roger Freeman, has led colleagues to dub Mr Freeman "Sooty", because he seems to be at Mr Heseltine's command.

Mr Heseltine has his own stationery, emblazoned with the crest used by the Cabinet Office and his titles, "Deputy Prime Minister and First Secretary of State". His total annual paper bill will be pounds 24,400. In addition, he has his own staff costing pounds 345,440 a year.

The Liberal Democrats claim that the true cost of having a Deputy Prime Minister is even higher. They point out that he "privatised" his own ministerial driver, when he resigned under Baroness Thatcher, and still employs his own chauffeur, with a Daimler, at a cost of pounds 43,628, excluding VAT.

His ministerial salary is pounds 42,834, in addition to his reduced Parliamentary pay. The four rooms he occupies, including a refurbished conference room he has turned into his private office, would cost around pounds 77,000 a year in rent on the open market, according to the Liberal Democrats, who say the real cost of Mr Heseltine's empire is pounds 753,000.

Mr Heseltine undoubtedly believes the Government is getting a bargain at the price. But Roger Freeman's suggestion that MPs should retire at 60 was regarded in Whitehall yesterday as a way of getting back at his boss. Michael Heseltine is 62.