Fowler to be questioned on Nadir funds for Tories: Labour to exploit link with fugitive head of Polly Peck

SIR NORMAN Fowler, the Conservative Party chairman, will be questioned about the extent of funding for the party from Asil Nadir, the fugitive head of the collapsed Polly Peck empire, by a powerful House of Commons select committee.

Labour leaders are planning to concentrate their fire on the Conservative Party funding from private sources, such as Mr Nadir, in the run-up to the hearing on 16 June by the cross-party Commons Home Affairs Select Committee which is investigating the funding of political parties.

Labour strategists believe they can inflict serious damage on the Tories' fitness to govern by linking Conservative election victories to Mr Nadir as well as other overseas businessmen and by exploiting the direct involvement in the funding controversy of senior ministers, such as Michael Heseltine, who raised more questions yesterday when he set about defending his role.

Neither Baroness Thatcher nor John Major, as leader of the Conservative Party, have had to face questions about Conservative Party funds in the Commons, because of a ruling that it is a matter for the party chairman.

But Labour leaders will press the committee to open Mr Major to questions about party finances on the floor of the House for the first time.

'The Tory party is not an incorporated organisation. As such, the leader should be answerable,' one Labour source said.

After the Serious Fraud Office began a criminal investigation into the collapse of Polly Peck, letters were disclosed showing that Mr Nadir was one of a number of overseas businessmen who contributed to Tory party funds before the 1987 general election.

Former officials of the Tory party have alleged that the party sought renewed funds from Mr Nadir before the 1992 general election campaign in spite of doubts about his integrity.

Before the election, it was disclosed that Mr Nadir's donations were not declared in Polly Peck's accounts.

Labour MPs have alleged he contributed pounds 400,000 to the Tory party, but that has not been confirmed.

Sir Norman will face questions about the amount of money received from Mr Nadir.

The Charter Movement, a Tory group demanding reform of the party's finances, has protested at the use of overseas donors for its election campaigns.

Lady Thatcher sent a standard 'thank you' letter to large-scale contributors after the 1987 election victory.

It said: 'With so much at stake, this election was one of the most vital we have fought. Your contribution helped to ensure our decisive victory.'

Two letters obtained from the files of Unipac Packaging Industries, a Nadir company based in Turkish Cyprus, show Lord McAlpine, the former Conservative Party treasurer, thanked Mr Nadir for pounds 60,000 and 'consistent support' in December 1988.

Larry Whitty, the general secretary of the Labour Party, which is incorporated, will be questioned about Labour's funding from trade unions when he gives evidence to the committee on 23 June. Labour also receive large donations from individuals.

Anticipating counter-attacks from the Conservatives, Mr Whitty will propose that all such donations should, in future, be declared and identified if they are above a fixed sum.