Union chief accused of using funds to boost New Labour

Labour's biggest union benefactor was in turmoil last night over allegations that its co-leader abused the organisation's funds to promote the interests of Tony Blair and New Labour.

Labour's biggest union benefactor was in turmoil last night over allegations that its co-leader abused the organisation's funds to promote the interests of Tony Blair and New Labour.

Derek Simpson, left-wing head of the Amicus-AEEU trade union, is to investigate claims that Roger Lyons, TUC president and general secretary of the MSF division of Amicus, misused union resources to promote the interests of Blairite candidates for union posts.

The allegations have emerged on the eve of the official opening of the union's new headquarters in central London, which will be attended by senior cabinet ministers.

Mr Lyons is accused of using the journal of Amicus-MSF, released yesterday, to boost the chances of New Labour in the forthcoming election to the union's national executive committee. At stake is the political direction of Labour's largest union affiliate in the run-up to the next general election.

Left-wingers point out that in the latest issue of the journal MSF Works, there are references to 11 New Labour candidates - and pictures of some of them - to the exclusion of any others.

The magazine, for which Mr Lyons is responsible, costs £500,000 to produce and circulates among 350,000 members.

Ballot papers go out today in the election for the first unified executive of the newly merged Amicus, which will begin its work in January. Three other factions are involved in the fight to control the new union: left- and right-wingers from the engineering section, and left-wingers from MSF.

In a reference to Mr Lyons' expected elevation to the peerage, one left-winger said Mr Lyons was "earning his ermine" by allegedly advancing the careers of New Labour loyalists at MSF. The Amicus-AEEU leader is retiring in a year's time, although Mr Simpson has already assumed administrative and financial control of the new amalgamated organisation.

Brian Pemberton, a left-wing candidate in the north-western area of the union, described the contents of the organisation's official journal as an "abuse of union funds" and an "obscenity". He accused Mr Lyons of rewarding existing right-wing executive members who voted to increase his salary by £20,000 to £100,000 ahead of his retirement. Mr Pemberton said that when the grassroots membership heard about the allegation, the membership would "blow them away".

Mr Simpson said the union took the allegations "very seriously" and would begin an immediate inquiry. If necessary the complaints would be passed to the Certification Officer, the Government's union watchdog.

Mr Lyons denied there was any attempt to promote the interests of one candidate above another.