Mandelson defiant over loan claims

Under-fire Northern Ireland Secretary Peter Mandelson stood defiant today over fresh allegations into the £373,000 home loan that almost ended his political career two years ago.

Under-fire Northern Ireland Secretary Peter Mandelson stood defiant today over fresh allegations into the £373,000 home loan that almost ended his political career two years ago.

Mr Mandelson insisted his original account of the loan, given by former Paymaster General Geoffrey Robinson, was correct.

Mr Robinson re-opened the row by publishing his version of events in a new book.

He claimed Mr Mandelson telephoned him to ask for the money for the flat in London's trendy Notting Hill.

But Mr Mandelson insisted: "As a friend of many years standing, he volunteered his financial help if needed. I later took him up on his offer and I was grateful to him.

"I have never suggested or implied that he forced a loan on me. Nothing would be more ridiculous.

"I gave a full, faithful and factual account to the House of Commons standards committee, as did Geoffrey himself. They accepted it and I regard the matter as closed."

Both men agree the subject of a loan was broached when the had dinner together in 1996.

Mr Robinson alleges his then close friend was so eager for his financial help that he called him the next morning to confirm his interest.

He told the BBC Radio 4's Today programme: "I think the fact that he re-initiated the discussion the following day shows that it was really Peter that was taking the lead in these matters and scotches any idea of my trying to put him up to it."

He widened his attack, describing Mr Mandelson as a "divisive and destabilising figure" within the Government and urging Mr Blair to bring him to heel.

"Peter does have this role of reopening issues when matters are settled. For example, the position on Europe. No sooner had we got a settled position than Peter would upset it," Mr Robinson said.

"It is in my opinion something he should control, it is something the Prime Minister should help him control, and I believe the administration of his Government would be more effective if he was able to do so."

The Conservatives called for new inquiry into the scandal, which led Mr Mandelson to resign his then Government post.

Shadow trade and industry secretary David Heathcoat-Amory said: "Once again we have Labour Party denials that they have received money which should have been disclosed, followed by fresh evidence that money was in fact taken but never registered.

"Labour are happy to lecture everyone else about high ethical standards but they continuously break the rules. We need a full inquiry to get to the bottom of how New Labour was funded and from where the money was obtained."

In the book, Mr Robinson, a millionaire businessman, said that he had been "happy" to support Mr Blair's political office while Labour were in opposition.

That appeared to contradict a statement issued last year by Baroness Jay, one of the three trustees of the so-called "blind trust" which handled donations to Mr Blair's office, in which she said flatly that Mr Robinson had not contributed to the fund.

Downing Street said today that Lady Jay was standing by her original statement. Prime Minister Tony Blair gave support to Mr Mandelson.

"What Margaret Jay said last year, she is standing by this morning," a spokesman said.

Independent MP Martin Bell said Mr Robinson's allegations were a source of concern.

"Speaking as a Member of Parliament, I do personally have concerns about this. There are two completely contradictory accounts of these conversations and they don't tally," he said.

When Mr Mandelson gave evidence to the original standards and privileges committee inquiry, he said Mr Robinson who had volunteered to help him.

When details of the loan came to light in 1998 both men were forced to resign from the Government. But while Mr Mandelson was back in the Cabinet within a year, Mr Robinson continues to languish on the backbenches.

Downing Street today dismissed the latest claims by Mr Robinson as "pretty flat froth".

"Peter Mandelson is a very effective minister in the Cabinet who is doing a very good job in what everyone acknowledges are difficult circumstances in Northern Ireland," a spokesman said.

Chancellor Gordon Brown, Mr Robinson's former boss at the Treasury, also moved to distance himself from his claims.

"Mr Brown has made clear on numerous occasions, both to Geoffrey Robinson and in public, that it was not appropriate to write this book," said a spokesman for the Chancellor.

"He believes that Mr Mandelson has been doing - and will continue to do - an excellent job as Secretary of State for Northern Ireland."

The long-running feud between Mr Brown and Mr Mandelson - which dates back to Mr Mandelson's decision to back Mr Blair rather than Mr Brown for the Labour leadership - had been widely blamed for details of the loan becoming public.