Ambassador is tied to Blair aide and steel tycoon

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A senior British diplomat was last night facing calls to explain his role in the Lakshmi Mittal affair after it emerged he had close personal links to the Prime Minister's chief of staff, Jonathan Powell.

It follows revelations that the British ambassador to Romania, Richard Ralph, had met Mr Mittal on several occasions and is an old friend and colleague of Mr Powell.

Tim Collins, Conservative Shadow Cabinet Office Minister, has demanded that Mr Ralph should be called before the Foreign Affairs Select Committee to explain his links to Downing Street and his role in involving the Prime Minister in the Romanian steel deal.

Mr Ralph recommended that Tony Blair write to the Romanian Prime Minister, Adrian Nastase, to endorse Mr Mittal's bid to buy the country's state-owned steel works, Sidex. The letter, which was approved by the government trade body, Trade Partners UK, has sparked a furore, after Downing Street changed its version of events four times.

Mr Collins said: "There are now very serious questions surrounding the role of the British ambassador to Bucharest in this whole affair.

"His close personal links both to Jonathan Powell and to those involved in arranging the steel deal mean that it is now imperative to establish exactly what conversations he has had with whom and when.

"The more time goes by, the more it is clear that only an independent inquiry can satisfy taxpayers that nothing improper has occurred."

The Tories are also planning to table questions about the ambassador's role.

Mr Ralph and Mr Powell worked together at the British Embassy in Washington between 1991 and 1993. It also emerged that Mr Ralph's partner, Jemma Marlor, is employed by the legal firm which worked on the £300m takeover deal for the Romanian government.

Last night Donald Anderson, the chairman of the Foreign Affairs Committee, said it was "unlikely" Mr Ralph would be summoned to give evidence. The Labour MP said the committee would not want to be embroiled in a partisan issue and it was "most unlikely" it would launch an inquiry.

"The choice of subject for inquiry is a matter for the committee as a whole," he said. "But it is most unlikely it would agree to a suggestion from a party spokesman at a time of intense partisan controversy."