After 12 years, Dame Shirley is back in Westminster

The "homes for votes" scandal has returned to haunt Westminster Council, after it emerged that its disgraced former Tory leader, Dame Shirley Porter, had come back to live in central London.

After 12 years of self-imposed exile in Israel, Dame Shirley has quietly bought a £1.5m flat at Curzon Square, a new development on Park Lane in Mayfair. Her new home is close to the sumptuous Bayswater flat from which Dame Shirley, a multimillionaire Tesco heiress, masterminded the gerrymandering operation during the 1980s. The affair, arguably the most scandalous case of political corruption in recent British history, saw Dame Shirley, now 76, convicted of selling council homes in marginal wards to prospective Tory voters.

She was also found to have forced 122 homeless families likely to vote Labour out of eight marginal seats, forcing them instead to live in tower blocks that the council knew to be contaminated with asbestos.

At the time, Labour was threatening to take control of Westminster, which was seen as one of Margaret Thatcher's flagship councils, following a near-victory in the 1986 elections. Following a district auditor's investigation in 1994, Dame Shirley was found guilty of wilful misconduct and gerrymandering, and ordered to pay surcharges of £31.6m to Westminster Council. This later rose to £42m with interest and legal fees.

She fled to Israel, which has no extradition treaty with the UK, and consistently refused to pay. At one point, her lawyers said she was down to the last £300,000 of her personal fortune, which had previously been estimated at between £80m and £300m. Two years ago, Westminster, which is still run by the Conservatives, accepted £12.3m in settlement of her outstanding debt, and the case is now considered closed.

Dame Shirley's biographer, Andrew Hosken, said yesterday there was no legal obstacle to her returning to London. She has been seen at a variety of society functions in recent months.

"Her husband, Leslie, died last year, and a lot of her remaining relatives are now based over here, so this doesn't surprise me at all. She is now the matriarch of the family," he said. "Dame Shirley always hated exile, and loves London. She was born here, made her reputation here, and lost it here. In fact, one of her favourite songs, which she even played on Desert Island Discs, is 'Maybe It's Because I'm a Londoner'." Dame Shirley's decision to buy a flat in Mayfair leaves her in the ironic position of becoming a rate-payer in Westminster, which boasts some of the lowest council taxes in Britain.

In a statement last night, the council said: "Westminster City Council agreed a settlement of £12.3m with Dame Shirley Porter in April 2004, following years of activity to recover the monies owed. The Audit Commission was consulted at key stages, and it noted the council's 'persistence and determination' throughout. The settlement in 2004 ended the council's pursuit of the debt. Where Dame Shirley Porter now chooses to live is a matter for her."