Nadir's donations part of campaign for knighthood: Ambition drove an outsider to give to an establishment from which he was excluded. Tim Kelsey and Chris Blackhurst report

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ASIL NADIR wanted respect. He was a British passport holder and, despite being among the 40 richest people in the country, was viewed as an outsider by those from whom he most sought acknowledgement: the Tory establishment.

Above all, according to friends and former colleagues, he wanted a knighthood. He would have been the first Turkish Cypriot to possess such an honour. It was this ambition which drove him to invest huge sums in the Conservative Party. He claims he donated pounds 1.5m.

Conservative Central Office has always refused to comment on the level of his contributions. But the administrators of Nadir's companies have identified contributions of pounds 440,000. The Independent has discovered that he gave pounds 500,000 more than this.

It was not just the knighthood, according to one source who was close to him before the collapse of Polly Peck. He was emotionally drawn to Mrs Thatcher and, being a generous man, gave substantial sums to the Spastics Society and to orphanages in his native Cyprus.

He was feted by senior members of the Tory party. In 1983, he was introduced to Norman Tebbit, then a Cabinet minister, by Mehmet Sakir, a business partner.

Lord Tebbit said yesterday that he had no role in soliciting funds from Nadir, and that he could not remember whether he was even aware of the donations. 'I find your attitude strange - that you choose to believe people who have been engaged in criminal conspiracies and they are obviously trying to suggest that all sorts of people in public life . . . have run errands for them,' he said.

'I was not a friend of Mr Nadir; I was not a friend of this other gentleman's; and I did not run errands for them.'

Nadir also had access to Lord Howe, and the former party treasurer, Lord McAlpine of West Green. Sources, who once advised the ambitious magnate, talk of dinners at Number 10 hosted by Mrs Thatcher, and relate the numbing disenchantment that came when he failed to become a knight in 1985. 'He was furious. He wanted respect as one of Britain's leading businessmen,' a former business associate said.

There were more donations and, according to well-informed sources, the search for social honours continued. One of Nadir's former public relations advisers has told the Independent that he was instructed to obtain the discredited entrepreneur a knighthood in 1989, and was promised a pounds 100,000 commission if successful. The Tories indicated that a knighthood was possible. Nadir should make a donation to the party's Industrial Fund. In response, Nadir pledged pounds 300,000 over two years.

This second bid for a knighthood was carefully orchestrated. He increased the level of his donations to charity. He promised pounds 5m to the Spastics Foundation, the NSPCC received pounds 150,000 and large sums were also pledged to the Royal Opera House, Sadler's Wells and the Royal Society of Arts. 'There was a point,' said the adviser, 'when Asil was making more donations to charities than anyone else in the country.'

The campaign was master-minded by the adviser reporting directly to Elizabeth Forsyth, Nadir's then personal assistant. At least two of the heads of the charities concerned wrote letters to Mrs Thatcher, the then Prime Minister, pointing out Nadir's good works and suggesting he be considered for a knighthood, but with no success.

In reply to one of them, a Downing Street aide wrote that the Prime Minister was 'glad to receive it' and added that she would give it her 'full and careful consideration'.

The Conservative Party denies knowing that any of Nadir's donations were tainted or illegal. But it was warned well before the 1992 election to beware his gifts.

It transpired shortly before the election that he was making donations without telling his shareholders, as required under company law. Polly Peck's administrators are considering suing the Conservative Party for the return of these funds.

The Tories have refused to disclose just how much Nadir contributed to their funds - but in 1988, at least, he was believed to have donated more than any other individual. A television documentary last year revealed contributions between 1985 and 1990 amounting to around pounds 440,000 drawn on accounts of Polly Peck International and his Jersey-registered company Unipac. In 1987, Mrs Thatcher wrote to thank him for a pounds 50,000 donation just before the election and said that he had 'helped ensure a decisive victory'.

Sir John Cope, then deputy chairman of the party and the honorary joint treasurer, admitted the Polly Peck administrators had contacted him regarding nine cheques paid to the Tories which were not declared in the company accounts. He said it was not his responsibility to ensure that donors complied with company law.

But Nadir made contributions significantly earlier than this. The pounds 500,000 contributed between 1983 and 1985 was paid, according to one source, from accounts in Switzerland.

But gradually Nadir grew impatient with the Tories. The man who was once praised by Lord McAlpine, the former party treasurer, for his 'consistent support' and in particular a pounds 60,000 gift to the Conservative Industrial Fund, eventually turned on the party.

Lord McAlpine alleges that in 1991 he was summoned to Nadir's Berkeley Square offices and warned that unless the Tory party worked to reduce or lift the charges against him he would tell all about his contributions. Nadir claims that: 'Lord McAlpine himself came to my office once to say to me how unfortunate my treatment was, and that was it.' At the time he was on bail of pounds 3.5m - the largest in British criminal charges - awaiting trial for theft and false accounting; a trial which he escaped by fleeing to Turkish northern Cyprus last month.

He may choose to be indiscreet now; and this could embarrass the Tories who are fighting to retain confidentiality over sources of funds. The Tories remain reliant on large donations from individuals and a raft of corporate donors. Local party contributions now amount to only about 7 per cent of their known budget. It has emerged that before the 1992 election, they received around pounds 7m from unidentified foreign donors who do not have a vote in Britain.

Tomorrow, Sir Norman Fowler, the Tory chairman, faces the powerful cross-party home affairs select committee which will be asking him about the role of Nadir and other foreign donors in the Tory party.

Meanwhile, Asil Nadir still appears to have influence in the party, as the Attorney-General disclosed last week. Seven MPs made representations to his office over the manner in which the Serious Fraud Office conducted its investigation into Nadir. These included Michael Mates, a Northern Ireland Minister, and Michael Heseltine, President of the Board of Trade.

Nadir may have believed he had influence. But, finally, despite his donations, he did not. Charges against him remained. Friends went so far as to conceive a plot that allegedly involved attempting to bribe the trial judge. It is thought that it was the discovery of this plot by the Serious Fraud Office that prompted his sudden departure to northern Cyprus.

(Photographs omitted)