Mandelson's Greek farce Act II

After last year's furore in Corfu, the minister is again courting controversy over lavish hospitality. Jane Merrick and James Hanning report

It was, arguably, one of the most memorable incidents of last year, and certainly one the key players would rather forget: involving Peter Mandelson, George Osborne, a couple of yachts, some of the planet's richest and most influential people – all set against the glistening backdrop of the Aegean.

Obviously unconcerned about the risk of tempting history to repeat itself, the two politicians again came together in 2009, again in Greece – and again surrounded by lavish floating gin palaces to mix with millionaires, billionaires and the world's elite.

Yet, while Mr Osborne noted his attendance at the Bilderberg conference in the MPs' register of interests, his co-player in this Greek drama's second act has been a little coy.

Lord Mandelson, like the shadow Chancellor, spent two nights at the five-star Astir Palace resort on an exclusive pine-covered peninsula outside Athens as a guest of the Bilderberg Foundation – the secretive organisation that has spawned a thousand conspiracy theories.

The Secretary of State for Business used taxpayers' money to fly to Greece because, happily, he had arranged a meeting with his Greek opposite number on the eve of the three-day conference in mid-May.

The taxpayer paid for hotel accommodation on Thursday 14 May, which his department said was justifiable because of the ministerial meeting the next morning.

He then stayed Friday and Saturday night at the Astir Palace, paid for by the Bilderberg Foundation, and flew back to Britain on Sunday.

A spokesman for Lord Mandelson said he had no need to declare the hospitality because it fell below the £1,000 threshold at which peers must declare their interests on the register within 30 days.

The spokesman refused to reveal what the accommodation cost, but the cheapest rate for a room at the Astir Palace is €390, which at the time would have been about £350 – total £700 for two nights. This was for a room with two single beds. Lord Mandelson's spokesman refused to say if he had gone for the budget option.

The next highest rate was €560, which for two nights would have tipped over the £1,000 threshold, even before the cost of meals and drinks, also funded by the Bilderberg Foundation, are taken into account.

While there is no suggestion of wrongdoing on the part of Lord Mandelson, a cursory look at the resort's literature suggests it would be difficult to spend less than £500 per day. There were also concerns that he had used taxpayers' money effectively to attend the Bilderberg conference. The resort is in the "most exclusive area of the Athenian Riviera", says the literature, where "luxury and nature combine to create a uniquely beautiful destination". On a private peninsula, it was developed in the 1950s as a playground for Greek shipping aristocracy, and multimillion-pound yachts are moored there all year.

The Lib Dem MP Norman Baker, who tabled questions in Parliament about the minister's attendance at the conference, said it was an "amazing coincidence" that Lord Mandelson has timed his meeting with the Greek business minister to coincide with the Bilderberg conference.

Mr Osborne sparked last year's Corfugate saga by leaking the news that Lord Mandelson "dripped pure poison" about Gordon Brown while the pair holidayed on the Greek island and on the yacht of the Russian billionaire Oleg Deripaska.

The threshold for declaring hospitality and gifts for MPs is £500, half that for peers. Mr Osborne registered the Bilderberg trip two weeks later. He refused to comment on the conference last night. Apparently recollecting last year's furore, an aide said wearily: "We're not going anywhere near that one."

A spokesman for Lord Mandelson said last night: "It's no secret that Peter went to Bilderberg.

"The trip was declared to the permanent secretary as usual and recorded in the departmental hospitality register. It was below the £1,000 threshold for the House of Lords register."