Downing Street admits it ordered Hindujas contact

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Downing Street admitted yesterday that it instructed Peter Mandelson to contact the billionaire Hinduja brothers about a donation to the Dome.

After a weekend of calls for No 10 to "come clean" over its part in the Hinduja "cash for passports" scandal, the Prime Minister's office confirmed that the Hindujas had first spoken to Tony Blair about sponsoring the Dome in 1998.

Yesterday MPs stepped up demands for the Hammond inquiry to be reopened following revelations at the weekend that Jonathan Powell, the Prime Minister's Chief of Staff, sent an official minute to Peter Mandelson to contact the Indian brothers without delay.

Norman Baker, the Liberal Democrat MP for Lewes, whose original question led to the resignation of Peter Mandelson, claimed yesterday that the Hartlepool MP may have been unfairly sacrificed because the Hammond inquiry was not given the full facts about Downing Street's role.

"This throws a whole new light on the Hinduja affair," Mr Baker said. "We need the Hammond inquiry reopened and this new evidence properly considered. Was Peter Mandelson cut off at the knees to save Tony Blair's skin?"

Yesterday Downing Street confirmed that Mr Blair met the Hindujas on 24 February 1998 at a sponsorship launch for the Dome where they expressed an interest in funding the project. The billionaire brothers wrote to Mr Blair five days later and, on 26 February, to Peter Mandelson in his capacity as Dome Minister.

Mr Blair's spokesman said it would have been usual practice for the Prime Minister's office to communicate to Mr Mandelson an expression of interest. "It might not be unreasonable to assume that a memo was written shortly after the contact on the 25 February," he said.

But Downing Street refused to confirm that Sir Anthony Hammond, who led an independent inquiry into the affair, had been given access to the memo instructing Peter Mandelson to contact the Hindujas.

Andrew Tyrie, Tory MP for Chichester, claimed that the Hammond inquiry had not seen any document showing the extent of Downing Street's contacts with the Hinduja brothers.

"The Prime Minister's contacts with the Hindujas are extensive and were never detailed to Sir Anthony Hammond," he said. "He therefore duped his own investigation and his report is a charade. We must have a new inquiry."

The news that Downing Street had asked Peter Mandelson to contact the Hindujas is revealed in an updated edition of Servants of the People, by the political columnist Andrew Rawnsley.

The fresh attention on the Hindujas' relations with the Government will embarrass Downing Street, which had hoped to draw a line under the affair at the last election. Downing Street claimed that the Hammond inquiry had access to any papers it wished to see.

"Sir Anthony Hammond was able to look at all relevant documents. He had a large amount of material," a Downing Street spokesman said.

Sir Anthony declared yesterday that he was "confident that whatever was in the papers that ought to have been relevant to the terms of reference, I saw them."

Friends of Mr Mandelson said last night that there was "zilch" in the allegations. "It is not as it is being presented," said a friend of the MP. "He is not getting involved in it."