Lord Neill confirmed that he would be representing Dame Shirley in the Court of Appeal but he insisted that he was following "the cab-rank principle" whereby barristers take cases as they emerge. "[Members of the Bar] do not pick and choose their cases on the basis of the popularity or unpopularity of the case or the client," he said.
A Downing Street spokesman indicated that there was no concern at No 10 about Lord Neill's acceptance of the brief.
"It is nothing to do with the Government whatsoever," he said. "Lord Neill is a barrister. Whatever briefs they [barristers] take have no reflection at all on their personal views."
The spokesman added: "I don't think anyone has called into question his probity or ability to perform his duties as chairman of the committee in any way. There's no reason to believe that situation has altered."
But news of Lord Neill's involvement in the case has outraged Dame Shirley's opponents. Andrew Dismore, the former leader of the Labour group on Westminster Council and now Labour MP for Hendon, raised the issue in the Commons yesterday, saying it was a "clear conflict of interest".
He later said: "Lord Neill's job is to look into issues of honesty in local as well as national government and Lady Porter's action has been characterised as the greatest act of corruption in local government history.
"I think that irrespective of Lord Neill's personal qualities, which are above suspicion, the question must be raised in anybody's mind as to whether it's appropriate for him to do both jobs."
The pounds 27m surcharge controversy resulted from Dame Shirley's and officials' and colleagues' responses to a poor showing by the Conservatives in May 1986 local elections.
In the summer of that year, Dame Shirley and a trusted team began developing a strategy which became known as the homes-for-votes gerrymandering scandal.
She and her colleagues earmarked council houses and flats for sale to young professionals with a view to filling key wards with people likely to vote Tory rather than homeless people or those on waiting-lists who might vote Labour.
District auditor John Magill found six councillors and four officers guilty of wilful misconduct and imposed a preliminary surcharge of pounds 21m.
A final report in May 1997 found Dame Shirley and five others guilty of wilful misconduct and "jointly and severally liable" for a surcharge of pounds 31.6m.
In December, a panel of High Court judges upheld the auditor's decision and said that Dame Shirley and David Weeks, her former deputy, had "lied to us, as they had done to the auditor, because they had the ulterior purpose of altering the electorate". The pair were ordered to repay the council pounds 27,023,376.Reuse content