Jack Straw, Labour's environment spokesman, has written to John Birt, the BBC director general, demanding the programme be shown before the 5 May poll, and describing the corporation's decision to 'suppress' the film as 'seriously damaging to the independence of the BBC'.
The editor of Panorama has received at least one critical phone call from Conservative Central Office complaining about the programme, which is the second about corruption in the council.
The programme alleges that at least pounds 50m of public money was diverted into helping the Tories 'buy' victory in the May 1990 council elections in the borough. In a highly critical report in January, John Magill, the district auditor, said there had been an 'improper and disgraceful' policy in Westminster of selling council properties to likely Tory voters in marginal wards. Ten Conservative councillors including the authority's former leader, Dame Shirley Porter, face possible personal surcharges of pounds 21.25m.
The programme, made by the same Panorama team that exposed the 'homes for votes' scandal in 1989 leading to the district auditor's investigation, suggests the surcharges could now reach pounds 40m and discovered a further pounds 10m of unexpected government grants helped Westminster to cut its poll tax by pounds 75 a head.
The programme had been pencilled in on internal schedules and was widely expected by its makers to be transmitted tonight. Being politically sensitive, however, it was checked by senior executives. John Birt is also thought to have been consulted. Inside sources at Panorama claim Mr Birt has decided to seek outside legal advice, over and above the BBC's lawyers, as a delaying tactic to postpone screening of the programme until after 5 May.
Last Friday, the programme's producer, Mark Killick, and reporter, John Ware, were told the programme would not be screened tonight after all because management had not yet made a decision on when it would be screened. They were also told to stop all work on the programme until a final decision had been taken.
Yesterday, Andrew Dismore, the leader of the Westminster Council Labour group, said it was 'a poor reflection on the BBC that it had given in to such political pressure'. Mr Straw said that the decision smacked of 'great cowardice by the BBC and of improper pressure by . . . ministers and Conservative Central Office'.
On two past occasions the BBC has delayed politically sensitive Panorama programmes. One - 'Project Babylon' about the Supergun, also made by Mr Killick - was delayed until the Gulf War was almost over. The second, 'Sliding into Slump' about the recession, was delayed until after the last general election.
Yesterday a BBC spokesman said it was completely untrue to say the programme had been suspended or dropped. Its transmission had never been determined by the timing of the local elections, nor was it ever firmly fixed for tonight. It would be broadcast when it was ready. There are still, he said, 'major legal considerations' to be resolved before it can be transmitted.