Blair under pressure over government links to Enron

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Indy Politics

Tony Blair was under pressure last night to reveal his involvement in decisions by the Government that helped the American energy giant Enron before its collapse. Downing Street sought to head off allegations of "cash for access" by admitting four government ministers held a total of seven meetings with Enron bosses between 1998 and 2000.

During this period, the Government abandoned a moratorium on the building of new gas-fired power stations after pressure from Enron and it allowed a subsidiary of the company to buy Wessex Water without an investigation by the Monopolies Commission. Enron spent £36,000 on Labour Party functions between 1997 and 2000, including a gala dinner attended by Mr Blair.

Number 10 decided to catalogue the meetings between Enron and Labour ministers in an attempt to halt a damaging spate of media revelations after the biggest corporate collapse in history. The unusual move was aimed at avoiding a repeat of the Bernie Ecclestone Formula One affair months after Mr Blair came to power.

However, the disclosures failed to quell demands by the Tories and Liberal Democrats for a full inquiry into the affair.

Mr Blair was also under pressure to reveal the links between the Government and the accountancy firm Andersen, which is embroiled in the Enron scandal in America because it was the company's auditor. Andersen has won several contracts from the Blair administration, including work on the private finance initiative, after it lifted a ban on government work imposed after Andersen's role in the collapse of the De Lorean car company. Downing Street insisted the process of ending the ban began under the previous Tory government.

Although Mr Blair's spokesman said the Prime Minister had no official meetings with Enron executives, the Tories seized on information released under America's freedom of information laws that suggested he was involved in the change of policy on power stations.

The US embassy in London told Washington: "Prime Minister Blair has recently intervened to water down the moratorium proposals in case the Government was taken to court on anti-competition grounds." The documents also show American energy companies knew when the Cabinet would be taking the crucial decision on the ban.

David Davis, the Tory chairman, said last night that "further clarification" was needed in the light of the US documents. "Tony Blair has to make clear what role he played in the decision to abandon the moratorium on building new gas-fired power stations," he said. Tim Collins, the shadow Cabinet Office minister, said the Enron affair dwarfed the sleaze allegations that beset John Major's government. "It is exactly a cash-for-access problem. What we are hearing alleged ... is that access to ministers, and even possibly changes in government policy, are directly linked to donations to the governing party."

Concern was also expressed by Labour MPs from coal mining areas, which were harmed by the policy U-turn. Eric Illsley, MP for Barnsley Central, said: "If they [Enron] were the ones who in return for money or donations actually got the moratorium lifted, then obviously some questions have to be asked about the probity of that."

Mr Blair's official spokesman said: "We would refute absolutely that there has been any impropriety. Ministers make no apology whatever for meeting senior businessmen from different companies. That includes energy companies. They would be failing in their duty if they did not meet them."

He added that the list of meetings showed that the Government's policy on power stations was consistent and that it worked to the company's detriment. A plan by Enron to build a gas-fired station on the Isle of Grain was held up by Labour until November 2000.

A spokesman for Andersen said: "Andersen does a relatively small amount of government work compared to our competitors. The suggestion that we are unusually close to the Labour Party – or any political party – is unfounded."

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