Auditor's Westminster report will spark row

JOHN MAJOR today chairs the first Cabinet meeting since the spate of government resignations, with ministers bracing themselves for fresh political embarrassment over a four-year inquiry into alleged gerrymandering by the Conservative-run Westminster council.

Meanwhile Labour is to switch its attack from 'hypocrisy' on personal morality to allegations of 'sleazy' dealings by prominent Tories. The backbench 1922 Committee's executive will discuss the Prime Minister's 'back to basics' policy shortly after he faces his first question time since the Christmas break.

The decision by the District Auditor, John Magill, not to make the findings of the Westminster report public today has fuelled government fears that it could be the prelude to a protracted legal row involving Dame Shirley Porter, the former council leader, and Barry Legg, a senior Tory MP. Mr Legg, MP for Milton Keynes South West and a member of the Commons Treasury Select Committee, is the former chief whip of Westminster's Tory group.

The inquiry has been into Labour claims that the council sold housing estates before the 1990 borough elections to secure a larger Tory vote in marginal wards. The indications are that the report estimates a pounds 10m council loss. The District Auditor can call on councillors and officers to show why they should not be surcharged to make good the loss.

The legal advice to Mr Magill that he cannot publish has prompted speculation that the report could contain separate details of an alleged cover-up after claims that Bill Phillips, the council's former managing director, shredded relevant documents. Withholding evidence from an Auditor's inquiry is a criminal offence.

The District Auditor is also understood to have looked into allegations - made by the BBC's Panorama in the summer of 1989 - that Sir John Wheeler, Minister of State for Northern Ireland, and Peter Brooke, Secretary of State for National Heritage, MPs for the two Westminster constituencies, were involved in early planning of the 'designated sales' policy.

Labour councillors are considering whether to release the full report, which has cost pounds 1m, when it is formally issued to them today. In a letter to Mr Magill, the council, still Tory dominated, described his decision not to publish as extraordinary. But it is expected to comply.

An ITN/Harris opinion poll last night showed 63 per cent of those questioned believed some ministers' behaviour was contrary to 'back to basics' policy. About 75 per cent said ministers who have supported the policy should resign if they commit adultery.

Andrew Marr, page 21