Ian McCartney has been moved from the Department of Trade and Industry (DTI) to the Cabinet Office, charged with keeping the party's grassroots happy.
But in a letter to Jack Cunningham, Minister for the Cabinet Office, Conservative spokesman, Andrew Lansley, said Mr McCartney's new job meant Labour should pay part of his salary.
"How is it possible that a minister, who is so clearly going to be spending a considerable amount of time on Labour Party activity, is expecting the tax-payer to foot the bill?" he asked.
Mr Lansley also demanded to know whether Mr McCartney, the MP for Makerfield, had been on annual leave while campaigning in the recent Eddisbury by- election in Cheshire.
Although the minister's party role was being played down yesterday, he is to be charged with boosting the Government's grassroots support.
Announcements on which backbenchers were to help him do the job were expected yesterday but appeared to have been put off as the controversy grew. Mr McCartney said yesterday he did not regard his role as being a Labour Party one and hit back at any suggestion his salary should not be paid for by the public purse.
"Any work I do for the Labour Party I do in my own time," he said. "I work for the Labour Party for nothing. In fact, to be honest with you, I'm so enjoying this job I'm doing I think I would do it for nothing."
Mr McCartney already heads an internal "healthy party" taskforce and has been a member of Labour's National Executive Committee for three years.
A party spokeswoman said his new role was largely a "formalisation" of the work he was already doing. Mr McCartney would probably spend more time working on party membership and recruitment than he had done previously.
The Tories also attacked the newly-promoted Helen Liddell for a potential conflict of interests over a seven-year investigation into disgraced tycoon Robert Maxwell.
Mrs Liddell, who moved from the Scottish Office to be Transport minister only a few months ago and who has now moved to the DTI came under fire for her past involvement with Mr Maxwell. The minister was on the board of the Scottish Daily Record, part of Mr Maxwell's Mirror Group, between 1988 and 1991.
Since 1992, DTI inspectors have been investigating the flotation of the Mirror Group and the fraud which led to hundreds of millions of pounds disappearing from the company's pension fund.
The Conservative spokeswoman on trade and industry, Angela Browning, sought assurances that Mrs Liddell would not have any role in the report on the Maxwell affair.
"It is symptomatic of the shambolic way in which Tony Blair has conducted this reshuffle that he has appointed Mrs Liddell to a department where the possibility of a conflict of interest is already emerging," she said.
Mrs Browning said she would be writing to the permanent secretary at the DTI and would also put down Parliamentary questions asking when the Maxwell inquiry, which has been going on seven years, would be complete.
A DTI spokesman said the minister responsible for the Maxwell case was Kim Howells, who would continue to oversee it. "Steps have been taken to ensure that Mrs Liddell sees no papers relating to the Mirror inquiry," he said.
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