Mandelson refuses to discuss £2.5m villa claims

The Business Secretary Lord Mandelson refused to comment today on questions over how he financed the purchase of a £2.5 million villa in London, saying he had a day job to get on with.

Lord Mandelson, who lost his first Cabinet position 10 years ago when it emerged he had not disclosed a £373,000 loan in a mortgage application for a £475,000 home in Notting Hill, said he did not know whether he would "have time or the inclination" to read the newspaper reports.

An investigation in last night's Evening Standard suggested that "even on the most generous possible analysis... there appears to be a substantial gap between the amount of money he was able to raise and the price he paid for his latest house".

Lord Mandelson told Sky News: "It was ever thus that some of these newspapers want to stir up this sort of problem. I'm afraid I have a day job and I'm going to concentrate on that."

The newspaper used publicly-available records of Lord Mandelson's "finances and his proceeds from a decade in the property market" to suggest that he was between £250,000 and £400,000 short of the money needed for the property.

It said Land Registry records showed he paid £2.4 million for his Regent's Park house - or £2.5 million including stamp duty and legal fees - which was "almost 16 times his income".

It was reported Lord Mandelson financed the purchase through a combination of selling shares in the advertising agency Clemmow Hornby Inge and a large legacy left by his mother Mary, who died in 2006.

But the newspaper said Companies House records showed the shares were not sold until June 2007, nearly a year after Lord Mandelson bought his Regent's Park house, and Mrs Mandelson's will "shows that the amount her son received, though substantial, was nowhere near £2.5 million". It calculated the amount at £452,000.

The newspaper also estimated that Lord Mandelson could have earned about £1 million through property transactions and took into account the possibility of a £750,000 mortgage - 4.6 times his salary.

It concluded: "This would have left him with a last gap to fill of between £250,000 and £400,000".

Yesterday, a spokeswoman for Lord Mandelson told the newspaper it had "made inaccurate assumptions" in its calculations.

The investigation was reported by Andrew Gilligan, the journalist at the centre of the 2003 row over the Iraq weapons dossier.