In an extraordinary attack, the Chief Secretary to the Treasury told a student audience that other countries allowed educational qualifications to be bought and contracts to be won with bribes.
His remarks - the second speech by Mr Portillo in a fortnight to cause outrage - upset diplomats and plunged John Major's Cabinet into fresh controversy after the Prime Minister had tried to steady the boat with his call to arms to Tory backbenchers at Westminster on Thursday night.
Mr Portillo, the darling of the right wing, mounted a damage-limitation exercise last night. Admitting his remarks were 'incautious', he told ITN they had been made in the heat of the moment. 'I was speaking off the cuff. I wanted to make the point that in British life we have very high standards in our public affairs. That is not true of all other countries. I exaggerated and I wanted to set the record straight. The basic point that we do enjoy very high standards in our public life and not all other countries are as fortunate, that is true. I didn't mean to exaggerate in quite the way I did.'
Mr Portillo recently raised hackles by attacking 'cynicism' among British intellectuals and opinion-formers in the media. He told the students yesterday in Southampton: 'If any of you have got an A-level, it is because you have worked to get it. Go to any other country and when you have got an A-level, you have bought it.
'When you go into business, you will win contracts because you are good at what you do. Go to a number of other countries and you would win contracts because your cousin was a minister or because you have lined the pocket of some public official.'
His remarks were reported to have drawn 'gasps' from the audience but were attacked as 'ridiculous' by a spokesman at the German embassy. 'We have an equivalent to the A-level which is every bit as good. There is no question that our students cheat.'
The Japanese embassy said: 'Educational standards in Japan are very high. We certainly don't buy our qualifications.'
John Denham, Labour MP for Southampton Itchen, said: 'Thank God he's not our Foreign Secretary. It is outrageous and deeply insulting to all other countries.'
Mr Portillo described the row as a 'storm in a teacup' and there were no signs last night that his job was at risk. But he admitted he had made the blunder as a result of Labour's attacks on the Government over alleged 'sleaze'.
'The reason I got into this terrain at all was because I was defending the Government and John Major against the thoroughly unjustified attacks that have been made upon him and the Government that in some way we are presiding over a slide into sleaze. People need to think about what things are like in Britain compared to things around the globe,' he said on BBC television's Newsnight.
Labour yesterday made alleged corruption in the Tory party the centrepiece of its campaign strategy for the European and general elections. Addressing a conference in Glasgow, Jack Cunningham, the party's foreign affairs spokesman, linked arms deals to Iraq and the scandal over foreign aid to Malaysia with Tory broken election promises on taxation.
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