Robin Cook, the Shadow trade and industry secretary, has called on Mr Heseltine to come clean over the admission that he 'had a word' with Sir Nicholas Lyell, the Attorney General, about the case.
Mr Heseltine is the third minister known to have contacted Sir Nicholas about the bankrupt ex-chairman of the Polly Peck empire, who jumped pounds 3.5m bail and fled to Turkish-controlled Northern Cyprus, which has no extradition treaty with Britain.
Nadir faces 13 charges of fraud and false accounting involving pounds 30m.
Mr Cook said yesterday: 'It is bad enough that a junior minister like Michael Mates should have taken up cudgels for Asil Nadir.
'It is breathtaking that the very Cabinet minister with responsibility for company laws should put in a word for a man charged with comprehensively breaking them.
'Michael Heseltine's job is to make sure company law protects the innocent, not to make representations to protect a private individual charged with defrauding the public.
'I am calling on Michael Heseltine to take two steps to clear the air. He must tell the public who was the person who persuaded him to take up Asil Nadir's case. He must restart the proceedings in his department to ban Asil Nadir as a company director.'
Mr Cook went on: 'Continued delay will only deepen doubts about Asil Nadir's relationship with this government.'
A Department of Trade and Industry spokesman said on Saturday night that Mr Heseltine 'did hear there were some concerns about the handling of the case by the Serious Fraud Office and he had a word with the Attorney General'.
'Someone spoke to him. There was a conversation. He did not write. He passed it on to the appropriate colleague. To the best of his recollection he has never met Nadir,' the spokesman added.
This approach was thought to have been made around the beginning of the year.