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No 10 admits ERM call to Lawson

(First Edition)

DOWNING STREET last night rejected Labour demands for a leaks inquiry and said the Government had authorised a 'courtesy call' to Lord Lawson telling the former Chancellor that the pound had been withdrawn from the Exchange Rate Mechanism before it was announced, writes Colin Brown.

The Prime Minister's office said: 'There was a courtesy call to Lord Lawson in view of his close connections to the Exchange Rate Mechanism.'

Lord Lawson, who failed to persuade Mrs Thatcher to allow Britain to enter the ERM in 1985, said yesterday in an interview with the Daily Telegraph: 'It was a major defeat. My heart sank.'

However, Margaret Beckett, the Labour deputy leader, said it was 'scandalous' that Lord Lawson had been told before the announcement. 'This wasn't a courtesy - it was a serious leak of vital information.

'I can understand the human impulse to tell Mr Lawson, but to have economic information of such vital importance to the national interest passed on to a major figure in one of our biggest banks (Barclays) is terrifying.'

Downing Street said it did not know who informed Lord Lawson. 'I am sure that it would have been authorised at senior level,' the Prime Minister's office said. It was not known whether John Major personally authorised the call.

Lord Lawson, a director of GPA, an Irish aircraft leasing company, and Barclays Bank, could not be contacted.