As the row over the role of Michael Ashcroft, the Conservative Party treasurer, continued to grow, William Hague and his party chairman, Michael Ancram, were forced to defend the businessman.
Mr Ashcroft, a major donor to the Conservatives over many years, has been accused of pressuring the Tory government in 1994 to protect his tax exemptions in Belize where he has substantial business interests. Tax changes planned after a report from a British consultant were dropped after Mr Ashcroft said they could cost him millions. The incident, five years ago, was confirmed by the Foreign Office this week after revelations in The Independent.
Last night a Labour MP, Peter Bradley, questioned two senior Conservative MPs about their roles in the affair. If civil servants did not inform either one of them of the details, he suggested, then the officials may have failed in their duty.
David Heathcoat-Amory, now shadow Chief Secretary to the Treasury, denied that officials told them about representations from Mr Ashcroft in 1994 about proposed changes to Belize's tax laws. David Davis, now chairman of the Public Accounts Committee, said he would respond when he had seen Mr Bradley's letter.
Mr Davis replaced Mr Heathcoat-Amory as Foreign Office minister on 20 July 1994, two weeks before the Belize High Commissioner, David Mackilligin, wrote to the then Prime Minister, Manuel Esquivel, "on instruction" from the Foreign Office.
Mr Mackilligin's letter pointed out that a UK-Belize treaty protected inward investors, but added: "The issues raised by Mr Ashcroft are clearly a matter for him and your government."
In letters to the two former ministers last night, Mr Bradley wrote: "May I ask whether ... it was normal practice at the time to allow decisions of this kind to be taken by civil servants and diplomats without reference to or sanction from their Minister?"
Mr Heathcoat-Amory and Mr Davis both said they had taken no part in the affair. Colleagues of Mr Davis added that in fact he had a "frosty" relationship with Mr Ashcroft and had only met him on one later occasion.
Another Tory MP, Bowen Wells, who is a former consultant to Mr Ashcroft and director of one of his companies, confirmed he had made representations to the Foreign Office on Mr Ashcroft's behalf.
Meanwhile, William Hague defended Mr Ashcroft and dismissed the allegations against him, including suggestions the American government was worried about drug money laundering in Belize as "smear and innuendo".
Mr Hague rejected suggestions that the Conservatives' new ethics and integrity committee should investigate Mr Ashcroft. "We proceed on the basis of facts. It's not for panic reaction to smears. On the basis of what I have seen there is not a case for doing that," Mr Hague told the BBC.
Mr Ancram described the attacks on Mr Ashcroft as "an unwarranted and misguided smear campaign". The most substantial allegation was that Mr Ashcroft asked the British government to help him dissuade the government of Belize from introducing retrospective tax legislation which would have severely damaged his business, Mr Ancram said.
"It would have been surprising if he had not done so and - as current Foreign Office minister Tony Lloyd admitted publicly - it would have been strange if the British government had not responded positively to his request."
Eric Chalker, deputy chairman of the Charter Movement, which campaigns for internal democracy in the Conservative Party, called for an investigation into Mr Ashcroft, if only to clear his name."What I want most is to see an elected treasurer, chairman and deputy chairman. This would clearly remove the issue from the desk of William Hague," he said.Reuse content