The Prime Minister faced Opposition demands to drop the consortium involving John Beckwith from the bids for the 57,000 MoD married quarters, after it was disclosed he had set up the fund-raising club for the Conservative Party.
The Premier Club seeks donations of pounds 10,000 from businessmen, with the promise of providing "opportunities for the positive exchange of views" at dinners with ministers. But for pounds 100,000 "as a founder member, you will be on the list of smaller dinners with the Prime Minister".
A Tory spokesman confirmed last night that Mr Beckwith was behind the club, but denied there were special favours for paying more. "He set the whole thing up. You do pay these sums, but one sum doesn't guarantee the Prime Minister and another doesn't say you won't see the Prime Minister."
The Central Office spokesman also denied a report in the Observer (although it was backed by a transcript of a taped interview with one of the club's organisers) that donors were advised how to dodge company law on the disclosure of political donations. They were told that it could be written off as "entertainment".
However, those claims inflamed the row. Robin Cook, the shadow Foreign Secretary, said: "This is the most blatant example of corruption in the history of even this sleazy Government. Businessmen may now be able to buy access and influence by slipping the Tory party a secret bung."
Mr Cook said he was writing to the Prime Minister, calling for Mr Beckwith's consortium to be removed from the list of bidders for the MoD homes. David Clark, the shadow Defence Secretary, said: "This man should not be allowed to bid for public assets."
John Beckwith is the younger of the Beckwith brothers, who made their fortune from the Eighties property boom with their stock market-quoted company, London and Edinburgh Trust.
Like his brother, Peter, he was educated at Harrow School and Cambridge University. Peter trained as a solicitor, John as an accountant, before moving into big time property. LET enjoyed one of the highest profiles of any property group, cropping up on some of the biggest deals, including the Spitalfields Market redevelopment in the City of London.
The brothers both live in south-west London - John is a major benefactor of Harlequins Rugby Football Club - which, ironically is where they hit controversy with their plans for the Richmond Ice Rink, one of the area's best known landmarks. The deal struck between Richmond Council and the Beckwiths was that they could pull down the building, which was badly in need of repair, and use the plum site right by the Thames for their own development - provided they built a rink elsewhere in the borough.
A clause in the contract said the new rink did not need to be built if property conditions went against the brothers. In the event, that is what happened. So, to the fury of many locals, the much-loved old rink has gone and a new one has never materialised. Meanwhile, the site of the old rink has been sold and used for luxury housing.
The Liberal Democrat leader, Paddy Ashdown, has written to Mr Major about the Observer's "deeply disturbing" report, demanding a Commons statement.Reuse content