Investigators wanted to raid Jowell's home

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Italian prosecutors asked the Home Office just over a month ago to order British police to raid the home of the Culture Secretary Tessa Jowell and her husband David Mills for evidence over his involvement in an alleged £350,000 "bribe" from Silvio Berlusconi, the Italian Prime Minister.

A letter sent by the Italian prosecutor's office on 23 January this year to the Home Office justice co-operation unit asked for the raid and accused Mr Mills, a corporate financier who had helped Mr Berlusconi avoid conviction over alleged Italian media frauds, of deliberately sowing confusion over the money trail by shifting cash from clients' accounts without their knowledge.

The prosecutors said: "Mills had constantly covered up the origins and ownership of this sum of money making use of three of his clients who were unaware of the operation. Mills purposely created confusion between his own business and that of his clients."

They said Mills had produced documents in an incomplete and confusing manner over the 10 years under which he was being questioned by Italian prosecutors. Offices were raided earlier by the Serious Fraud Office but it is understood the Culture Secretary's house was not raided.

Last night, Mr Mills told BBC that the money did not come from Mr Berlusconi. "One thing is absolutely certain, it didn't," he said.

The Home Office denied a claim it had hampered the investigation by sharing sensitive details of it with the Berlusconi government

The claims cast further doubt on the political future of Mr Mills' wife, who is the subject of an inquiry by Sir Gus O'Donnell, the Cabinet Secretary. Last night, it was reported he had widened his investigation by looking at the five separate remortgages Ms Jowell and her husband took out. Italian investigators claim one of the mortgages ­ a £350,000 loan against their north London home ­ was used to facilitate the payment of the alleged bribe.

As co-owner of the house, Ms Jowell would have been legally obliged to sign the loans, which would link her to the scandal that has engulfed her husband. "Her position looks increasingly untenable," said one Labour MP. "She is not a dishonest person and well liked but appears to have been a fool."

Ms Jowell made it clear to friends she was determined to fight for her cabinet career, and could produce documents showing Mr Berlusconi was not behind the "gift" of more than £350,000 in dollars that sparked the allegations.

Downing Street said Sir Gus was looking at the evidence to see whether a breach of the ministerial code had occurred.

The code states ministers or their spouses should not accept gifts that may put them under an obligation.

Ministers are also required to avoid a conflict of interests and to alert their permanent secretaries of all interests that may cause a conflict. Ms Jowell was a junior employment minister when the money was alleged to have been given to Mr Mills by Italian associates of Mr Berlusconi.

She became Culture Secretary in 2001, responsible for media policy. Her husband's work with Mr Berlusconi, who has extensive media interests, could have caused a conflict of interests.

Tony Blair's spokesman said that under the rules, the Prime Minister has the final decision over whether there has been a breach. But if Sir Gus finds evidence to support such a claim there is little doubt Ms Jowell would be forced to resign.