Blunkett asks sons to dispose of DNA firm shares

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The Work and Pensions Secretary said the firm had no contracts with his department or the Child Support Agency and he had not made any representations on its behalf or given it any advice. He added: "There has therefore been no conflict of interest.

"However, I am not prepared even to have the appearance that there could be any potential future conflict whilst the trust retains any shares in DNA Bioscience. I have therefore asked my sons to authorise the trustees to dispose of the shares. They have agreed to this.

"I have taken this step not only to avoid continuing misinterpretation of the position, but also to protect family and friends from further intrusion and hope that will be respected."

Tony Blair's official spokesman said Mr Blunkett would remain in the Government after the statement and said the Prime Minister would be content with the Cabinet minister's decision. Asked if the Prime Minister thought that would draw a line under the controversy, the spokesman replied: " Yes."

The controversial Cabinet minister, who has already left the Government once after revelations about his private life, has been engulfed by controversy since it emerged that he became, briefly, a director of technology firm DNA Bioscience for two weeks - after he had quit as Home Secretary and parliament was prorogued in the run-up to the general election.

Tories said he had breached the ministerial code by accepting such an appointment and after it later emerged he had bought shares in trust for his sons, and the shareholding persisted following Mr Blunkett's return to the Cabinet, there were claims that constituted a conflict of interest.

The company was said to be potential bidders for a contract for work with the Child Support Agency, run by Mr Blunkett's department.

The Prime Minister's spokesman denied that he had this morning implied an inquiry was going on in Whitehall into the business arrangement, saying: "What I said this morning was that as is normal in these matters, advice is being sought."

He would not confirm Mr Blair had met Mr Blunkett this afternoon, after reports the Cabinet minister had been seen going into No 10.

But the spokesman insisted the premier's "full support" for his Cabinet colleague had been obvious from remarks Mr Blair made this morning.

The spokesman went on: "I think you can take it that the Prime Minister will be content with what David Blunkett has decided to do.

"David Blunkett has the full support of the Prime Minister full stop. Questions have been asked and questions will be answered."

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