Bob Blackman, leader of Tory-controlled Brent council, in north London, left the letters on his computer when, after receiving a new one, it was re- allocated to his Labour opposite number.
The computer files also reveal a transcript of a conversation at a Labour councillor's home which shows he was being bugged, claims the Opposition.
Ken Livingstone, MP for Brent East, has tabled a Commons early day motion accusing the Tories of "rigging" the local government grant system. All those named in the letters have been challenged to put their replies in the Commons library. According to Mr Livingstone, in July last year, Mr Blackman wrote to Conservative Central Office, saying that last year's "damping grant", softening the impact of a cut in the council's standard spending assessment, was "welcome relief in election year".
He set out a shopping list of government grants for this year, "to ensure there are no swingeing increases in the level of council tax set by the borough next year".
On the same day, 19 July, Mr Blackman wrote to David Ruffley, special adviser to Kenneth Clarke, the Chancellor. "You will recall that we agreed that having held on to certain key boroughs in the local elections (and Brent is Conservative controlled by the mayor's casting vote), it would be foolhardy for the Government to then penalise us in the next year's SSA round."
Similar letters, said Mr Livingstone, were sent to: George Bridges at the Political Office in Downing Street; Keith Adams and James Gray, special advisers at the Department of Environment; Damian Green at the No 10 Policy Unit; John Gummer, Secretary of State for the Environment; and David Curry, Local Government Minister.
More serious is Mr Livingstone's other charge that Mr Blackman tried to prevent exposure of the award of pounds 70,000 of council grants to the Brent Irish Centre in exchange for electoral support for the Tories.
A Labour councillor, John Duffy, who was investigating the grant abuse, allegedly had his home bugged. Details of Mr Duffy's private conversation were entered on Mr Blackman's computer and used to try to intimidate him into dropping his inquiry, claims Mr Livingstone.
Mr Blackman refused to make any comment.Reuse content