`No more action' on loan scandal

PETER MANDELSON has avoided a police inquiry into his application for a mortgage, even though he failed to tell the Britannia Building Society about his pounds 373,000 personal loan from Geoffrey Robinson.

The Britannia announced yesterday it would take no further action against Mr Mandelson, saying the information he gave when he applied for a pounds 150,000 mortgage was "accurate". Sources close to Mr Mandelson insisted he did not disclose the loan because it had not been arranged when he applied for a mortgage in 1996.

At the time, he had hoped to find the rest of the pounds 475,000 needed to buy his house in Notting Hill, west London, with help from his mother. But when her financial circumstances did not allow it, he turned to Mr Robinson, who later became the paymaster-general.

Sources close to Mr Mandelson admit it was an oversight that he did not tell the Britannia about the loan."He wanted to maintain the confidentiality that he had agreed with Mr Robinson," said one.

The Tories questioned the building society's decision, saying there should not be one rule for ordinary house buyers and another for government ministers. John Redwood, the trade and industry spokesman, called on the Britannia and Mr Mandelson to publish all the details of the loan to help the inquiry by Elizabeth Filkin, the Commons standards watchdog, into whether the arrangement should have been declared in the MPs' register of interests.

John Heaps, Britannia's chief executive, insisted that "no special courtesies" had been extended to Mr Mandelson. Normally, the society calls in the police only when borrowers fail to maintain repayments.

Mr Heaps said Mr Mandelson's mortgage account had been maintained satisfactorily at all times, and he had written clarifying his present financial position. "I am satisfied that the information given to us at the time of the mortgage application was accurate," he said.

Mr Mandelson said he was "delighted" he had been given a "clean bill of health" by the building society.

Meanwhile, the Tories criticised Mr Mandelson's involvement, at the invitation of the Prime Minister, in a joint working group with the German government yesterday.