In the wake of the Westminster affair, Labour MP Peter Hain tabled a motion in the Commons demanding an investigation by the District Auditor into alleged 'political ethnic cleansing' by the Conservative council in Wandsworth dating back to the early eighties.
Mr Hain said last night: 'Instead of being made available to people on the waiting list, more than 5,000 empty homes were sold. There was a ruthless and systematic political manipulation of the housing stock.
'You could see Labour strongholds on council estates being transformed in front of your eyes by this policy of political ethnic cleansing, where Labour voters were replaced by Tory supporters who bought up empty properties.'
The allegations were immediately denied by Sir Paul Beresford, Conservative MP for Croydon Central, and leader of Wandsworth Council until 1992. He said the borough's housing policy had been investigated no less than six times since 1988 by the District Auditor, and had been given a clean bill of health.
The claims about Wandsworth came amid further revelations about Westminster council, including links between the alleged gerrymandering of former leader Dame Shirley Porter and the Conservative hierarchy.
Secret documents annexed to last week's critical report by the District Auditor disclose that the Downing Street Policy Unit had been invited to a strategy conference at Frimley Park, Camberley, in May 1988 when 'Winning the election - Dirty Tricks' appeared on the agenda.
In a further embarrassment for Westminster Tories, Jeremy Sullivan, the QC employed by the council to give a legal opinion on the homes-for-votes policy publicly confirmed a report in the Independent that he had been misled.
He authorised Labour councillors to release a confidential transcript of his interview with District Auditor John Magill, who provisionally recommended last week that Conservative councillors and officials should be be surcharged pounds 21m - the cost of the council house sales policy to ratepayers.
Dame Shirley and her colleagues have always maintained that they thought that their plans to increase the Conservative vote by selling 'designated' council houses to owner occupiers in eight marginal wards were lawful.
In California on holiday yesterday, she said: 'I am somewhat astonished. We took legal advice each time over this policy, which was Government policy at the time.'
Her lawyer's decision to distance himself undermines the Westminster Tories fight against surcharge.
The transcript of the interview shows that Mr Sullivan did not see vital information and reports.
Mr Magill asked him how he would react 'if (the council) had said . . . '(We) nearly lost the last election and since then we have been talking about targeting marginal wards . . . about designating (for sale) all the properties in those eight wards'?' Sullivan replied: 'I would have said: 'It's unlawful.' '
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