Labour faces questions over its links with Global Crossing, the US telecoms giant which critics are dubbing Enron II after it collapsed with debts of more than £8.5bn last week.
Global Crossing is accused not only of dubious accounting by a whistle-blowing former senior executive, as well as retaining Enron's accountants, Arthur Andersen, as its auditors, but also spending fortunes supporting and entertaining politicians.
The Enron row – which has already claimed Lord Wakeham as its first political victim – could lead to a Commons select committee inquiry into "cash for access" by firms which sponsor events to gain contact with ministers.
The Liberal Democrats are to table questions about Labour relationship with Global Crossing this week. Matthew Taylor, their Treasury spokesman, said: "Once again the Government has fallen head over heels for a company that has less than stable foundations."
And he accused the Treasury of breaching civil-service code by allowing Andersen to sponsor one of its conferences when the firm was involved in government contracts.
In the UK, Global Crossing held lavish dinners at Claridge's, where it entertained cabinet ministers, close advisers to Tony Blair and a slew of other leading politicians.
At the same time it was securing UK government contracts worth more than £500m and was being allowed to buy one of Britain's largest telecoms businesses.
Global Crossing was created five years ago by Gary Winnick, an ex-bond trader. He joined forces with Lodwrick Cook, former chairman of the oil group Atlantic Richfield.
Mr Cook was a big donor to the Republican Party and a friend of both former president George Bush and Baroness Thatcher. In 1994 he became one of the few Americans to receive an honorary knighthood, bestowed upon him by the Prince of Wales at a ceremony in Los Angeles.
The father of the current US President famously was paid in shares for giving a speech to the company. As the stock soared in the dot.com boom, their value reached £10m.
Mr Winnick, meanwhile, was a large donor to the Democrats. The business became the 23rd largest donor to political parties in the US, giving £2m in the run-up to the 2000 presidential election.
In the UK, it restricted its influence to entertaining politicians. In November 2000 Mr Cook hosted a lavish dinner attended by Margaret Beckett and Peter Mandelson, both of whom were then in the Cabinet, as well as the No 10 special advisers Anji Hunter and Andrew Adonis.
The dinner came at the end of 12 good months for Global Crossing in the UK. In October 1999 it was allowed to buy Racal Telecom for £1bn. In May 2000 it won a £150m contract to build communications links for British embassies worldwide and in July a consortium in which it was a main partner won a similar contract from the Home Office, worth £350m.
On the back of such success, Global Crossing's market value soared to more than £40bn, allowing Mr Winnick to sell shares worth £400m. However, like Enron, the group was creaking under massive debts and, according to a whistleblower, using questionable accounting.
Roy Olofson, a former vice president, wrote to Global Crossing's lawyers warning of "deceptive accounting". He accused not only the firm but also its auditors, Andersen, the accountants at the heart of the Enron scandal.Reuse content