Chief Political Correspondent
Michael Heseltine last night disclosed he had launched inquiries weeks before questions were raised by Labour which showed shipments of naval guns by BMARC to Singapore could have gone to Iran in breach of an arms embargo.
The President of the Board of Trade's disclosure that his inquiries may have begun as early as March startled Opposition MPs and deepened problems facing Jonathan Aitken, embattled Chief Secretary to the Treasury, in defying resignation calls.
Last night Mr Aitken's allies rallied round, but he faces the prospect of a tough inquiry by the Trade and Industry Select Committee which tomorrow is expected to call for wider powers to take evidence from the intelligence services.
Mr Heseltine's dramatically frank account left Labour demanding to know why Mr Aitken, a BMARC non-executive director, had failed to discover the trade. In a robust defence of his own position, Mr Heseltine carefully avoided mentioning Mr Aitken, who sat impassively on the front bench with arms crossed at the start of the debate seeking an independent inquiry.
Jack Cunningham, the shadow Secretary of State for Trade and Industry, said the sale of the naval guns, Project Lisi, went to the heart of the Government's integrity and competence. "Are we to believe that a man who says he took his non-executive duties seriously, did not see fit to press his fellow directors as the real nature of Project Lisi."
For the second time in seven days, Mr Heseltine emerged with his reputation for honesty enhanced. Colleagues speculated about his role in a possible autumn leadership election as John Major's leadership crisis deepened.
Tory MPs said after voting to reject the Labour inquiry by 291 votes to 267 - a government majority of 24 - that the Prime Minister could not afford to lose Mr Aitken. "He would cause too much trouble on the backbench," one Tory MP said.
It is believed at Westminster that Mr Heseltine, with his Defence Secretary background, was able to get more detailed information by his knowledge of the intelligence services. He said he had asked precisely the same questions that were later tabled by Brian Wilson, a Labour front bench spokesman on trade and industry, leading to last week's statement by the President of the Board of Trade.
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