Tycoon's illegal 'underground palace' buries his hopes of ruling Hong Kong

Tang blames his wife after the media expose the truth about his secret luxury basement

Politicians on the campaign trail are frequently haunted by their secrets – but it is not often thatthey involve an illegal "underground palace".

Henry Tang, who had been tipped as Hong Kong's next leader, has been forced to face down calls to bow out of the election race after a luxurious 2,250 sq ft basement was discovered under his house – in violation of the territory's strict property development laws.

Mr Tang had claimed that the unauthorised basement was nothing more than a storage cupboard, but was forced to admit the truth when local media hired cranes to see over the walled compound of his house in the upmarket Kowloon area.

From their vantage point, reporters could look into the basement through the glass-bottom of the courtyard swimming pool, and discovered that the "storage cupboard" contained a wine cellar, home theatre, Japanese-style bath and a mini-gym. Mr Tang, 59, a textile heir and a favourite among Hong Kong's business community, was quick to apologise. But he also pointed fingers at his wife and blamed their marital problems for the oversight.

"I apologise to all Hong Kong people," an emotional Mr Tang told a press conference. "It was my wife's idea and I knew they were illegal. Since we were experiencing a low ebb in our marriage... I did not handle the matter swiftly. I take full responsibility for the incident."

Mr Tang's wife, Lisa Kuo, wept as she apologised, telling reporters that she had supervised the renovation of the couple's house as her husband was too busy with work. "I just wanted to plan a comfy place for my family," she said.

The Chinese-language newspaper Apple Daily accused Mr Tang of selling-out on his on wife in pursuit of power, and said his credibility had been "buried" by his "underground palace".

A chronic shortage of space in Hong Kong means many of the island's seven million inhabitants live in homes a quarter of the size of Mr Tang's basement.

He could face up to two years in prison and a fine of 400,000 Hong Kong dollars (£32,500) for the offence if authorities press charges.

Hong Kong's next leader is due to be chosen by a 1,200-member election committee next month. Although he has not yet officially declared his intention to run, Mr Tang is Beijing's favourite to succeed the current chief executive, Donald Tsang.

"He has almost lost all his credibility in the whole thing, he lied every day," political scientist Ma Ngok of the Chinese University of Hong Kong told AFP. "It appears that he's still trying to canvass Beijing's support, but based on his credibility it will be very difficult for him to lead Hong Kong for the next five years, even if he is elected."