Downing Street admitted yesterday that Tony Blair used a trip to the Czech Republic to promote the sale of jet fighters made by a company which has donated money to Labour.
The Prime Minister discussed the sale of 24 JAS-39 fighter planes with his Czech counterpart last week. The aircraft are made by a British-Swedish consortium that includes BAE Systems.
The trip, which was squeezed in between the summit at President George Bush's ranch in Texas and the Queen Mother's funeral, was arranged officially to discuss European Union enlargement. But The Independent on Sunday found that he had also discussed the arms deal with Milos Zeman, the Czech Prime Minister. Mr Zeman confirmed that Mr Blair sent him a letter last November backing the BAE Systems bid. BAE Systems has donated more than £5,000 to Labour funds since 1998 and paid £12m to sponsor the Mind Zone in the Millennium Dome. It also sponsored a ministerial question and answer session at the 1999 Labour Party conference.
Yesterday, the Conservative Party renewed calls for an independent scrutiny of government links with party sponsors, an idea being considered by the Wicks Committee on Standards in Public Life.
Downing Street confirmed the arms deal had been discussed with Mr Zeman but insisted there was nothing improper in these actions.
A spokesman stressed that the Czech Republic's desire to join the EU was the main issue in the talks but said other matters were discussed, including the proposed purchase of the 24 jets.
The spokesman said the Prime Minister "makes no apology for promoting Britain and British business". Nevertheless, the controversy has echoes of the Mittal affair when Mr Blair promoted a steel company in Romania just weeks after its owner had donated cash to Labour. On Saturday, the Government had to defend its decision to award a contract for producing emergency smallpox vaccine to a drug company owned by another Labour contributor.
The Government became embroiled in a row involving BAE Systems last year when it approved an export licence for the company's expensive military air traffic control system for impoverished Tanzania. Sir Richard Evans, chairman of BAE Systems, has also sat on the Government's competitiveness advisory group task force.
Mr Blair raised suspicions in Westminster last week when he insisted on travelling to Prague after a gruelling two-day trip to Texas to meet President Bush. The extra flight surprised observers who expected Mr Blair to be preparing for the Budget and the Queen Mother's funeral.
The arms deal, which aims to supply Saab-BAE Gripen fighters to replace the Czech Republic's ageing Mikoyan MiG-21s, has been resisted by the Czech Parliament.
Meanwhile, the most damaging "sleaze" row to hit Mr Blair's government resurfaced last night when his most senior adviser was revealed to have played a key role in soliciting a £1m donation to Labour from the head of Formula One, Bernie Ecclestone. David Ward, a long-time aide to the former Labour leader John Smith, said Jonathan Powell, the Prime Minister's chief of staff, made the first move to add Mr Ecclestone to Labour's list of donors in 1996.
Mr Ward also revealed that Mr Powell set up a meeting two years later in Downing Street at which the billionaire and motor sport chiefs urged ministers to change their policy on banning tobacco advertising.
In 1998, after Formula One was granted an exemption from the proposed ban, Mr Blair was forced to return the donation to Mr Ecclestone.Reuse content