Labour peer sparks new 'lords-for-hire' row

A Labour peer caught up in the "lords-for-hire" affair asked a government minister to arrange a meeting with his client, after her department rejected its controversial plans for a £400m gas storage plant.

Lord Taylor of Blackburn approached Baroness Andrews in October 2007 to ask if the American firm Canatxx could meet the Department of Communities and Local Government (DCLG), following the rejection of the plans for an underground facility in Fleetwood, Lancashire. Less than two months later, Canatxx representatives met DCLG "policy officials" to discuss government policy on gas storage facilities. The firm has since resubmitted the planning application and has expressed confidence that the proposal will be accepted.

The episode lifts the lid on the remarkably direct contact between a minister and a peer acting for a client, in one of the most sensitive areas of government.

Opposition politicians last night complained that the events suggested that "special treatment" had been given to a Labour lobbyist and his paying clients – and demanded an investigation.

The episode is the latest row to engulf Lord Taylor, who was one of four Labour peers embroiled in a newspaper "sting" which led to allegations that they were prepared to accept money to change legislation on behalf of corporate clients. They all deny any wrongdoing.

Lord Taylor lists "Adviser, Canatxx Energy Ventures Limited" among 10 consultancy positions or paid directorships in the Register of Lords' Interests. He had to apologise to the House of Lords last year after he asked a question about gas storage without declaring he was a paid consultant to Canatxx.

The Secretary of State for Justice, Jack Straw, a close ally, has also been criticised for his links to the firm after failing to register a £3,000 donation Canatxx gave him in 2004.

The DCLG confirmed that Lord Taylor pressed Baroness Andrews for a meeting between Canatxx and her department shortly after the Secretary of State for Communities, Hazel Blears, turned down the company's plans to store more than one million tons of natural gas under the Wyre countryside. Officials last night claimed the resulting talks concerned only their "general policy" on storage facilities and did not amount to privileged access.

Lord Taylor's lawyer said the peer had followed the rules in declaring all his interests.