Lonrho shows how business used Whitehall

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A special relationship be-tween government ministers and big business was alive and well more than 20 years ago when a senior member of the Cabinet passed on intelligence to the late entrepreneur Tiny Rowland, according to secret papers released today.

Sir Alec Douglas-Home used his position as Foreign Secretary to ask civil servants for information on a Kuwaiti businessman who had approached Rowland's Lonrho corporation about a joint venture in the Arabian Gulf in 1971.

A series of memos show how ministers and civil servants were at that time fully prepared to swap gossip on a foreign national in the name of British firms. A Foreign Office dossier held at the Public Records Office in Kew, west London, details how Sir Alec passed on a request from Lonrho, at the time one of the world's biggest companies, for information on the entrepreneur, Dr Osman Khalil.

Mr Rowland was later famously described by Conservative leader Edward Heath as the "unpleasant and unacceptable face of capitalism", but a memo from 30 April, 1971, shows that the magnate had once enjoyed a warm relationship with Whitehall as he sought the inside track on Dr Khalil's fishing business.

Sir Alec wrote to embassy officials in Kuwait: "Lonrho, who have no experience in the Gulf, have asked for our opinion of Dr Khalil's bona fides and on prospects for profitable co-operation with him.

"They are conscious that Khalil's proposal was very vague but they are keen to do business in Kuwait if the prospects are reasonable.

"Grateful for any further information or views which we could pass on to them. Douglas-Home."

An unnamed Foreign Office official responded: "There have been many rumours about Khalil being over-ambitious and sometimes more harsh allegations.

"We have been unable to substantiate these. But Lonrho would be well-advised to tread cautiously with Khalil who is reputed to be able to 'charm the birds from the trees etc'."

Sir Alec expressed his gratitude, writing to the embassy in Kuwait: "Lonrho were most grateful for this information . . . They will get in touch with you during the course of their visit."