Prescott accused of taking tycoon's gifts as troubles multiply

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The Metropolitan Police have been asked to investigate whether John Prescott broke anti-corruption laws when he accepted an invitation to stay with Philip Anschutz, the billionaire owner of the Millennium Dome.

Norman Baker, the sleaze-busting Liberal Democrat MP, yesterday wrote to Deputy Assistant Commissioner John Yates, of the specialist crimes directorate, asking him to launch an inquiry under the Prevention of Corruption Act.

Mr Yates, who is conducting an investigation into the cash-for-honours affair, received the formal request yesterday. Senior anti-fraud lawyers believe that Mr Prescott may have breached the terms of the Act, which say that ministers should not accept hospitality from a person or organisation that has obtained or is trying to obtain an official contract. They suspect Mr Prescott may have been guilty of a conflict of interest by accepting an invitation to stay at Mr Anschutz's Colorado ranch last year.

Mr Prescott was last night alleged also to have received gifts from Mr Anschutz during his stay. The Mail on Sunday claims he accepted a pair of tooled leather cowboy boots, a Stetson and a silver-buckled belt bearing the initials "JP". There is no suggestion of impropriety on Mr Anschutz's part. The billionaire operator is keen to open a casino in the Dome, which he bought from the Government in a profit-sharing arrangement.

"There is a prima facie case that needs to be investigated. I have asked the Met to investigate Mr Prescott and his acceptance of Mr Anschutz's hospitality under anti-corruption laws," Mr Baker said.

Lord Oakeshott of Seagrove Bay, a Liberal Democrat Treasury spokesman, said Mr Prescott had "clearly put himself and his civil servants in a position where there is a conflict of interest... The rules are very clear and his relationship with an American billionaire with a government contract makes his position as Deputy Prime Minister untenable," he said.

Whitehall is furious that the Deputy Prime Minister compromised the integrity of officials in his private office who accompanied him during his stay at the ranch. Civil servants are advised not to accept hospitality if a conflict of interest could be anticipated, and they could also be investigated under anti-corruption laws. They have been advised by the head of the Home Civil Service to register the stay.

Internal government documents, obtained by The Independent on Sunday under freedom of information laws, show that Mr Prescott was kept closely informed about casino policy. His officials also took part in discussions about Mr Anschutz's casino plans.

Judith Seddon, a lawyer specialising in fraud, said she believed there was a case for a police investigation. "It's important that there is complete integrity in the award of these contracts," said Ms Seddon, a partner in the fraud and regulatory department of Russell, Jones & Walker.

"The police could justifiably start preliminary investigations under the terms of the Corruption Act. A police investigation would have to look at relations between Anschutz and Prescott and whether any other people who tendered for the Dome casino are treated similarly and whether any hospitality was offered."

Tony Blair and Gordon Brown are keen to avoid a damaging contest for the deputy leadership, which both fear could harm the prospects for a " stable and orderly transition". But Downing Street was reported last night to be lining up David Miliband to stand in as the Prime Minister's deputy if Mr Prescott was forced to quit.

Some of Mr Blair's allies are urging him to "decouple his future" from that of his beleaguered deputy. Last week, Mr Prescott is said to have "stormed out" of a cabinet meeting on Thursday ­ a sign he may be under political pressure.

Mr Blair also faces questions from MPs about his own meetings with Mr Anschutz this week.