McKinsey probed its advisers' work for Enron

McKinsey, the management consultancy with close links to Tony Blair, called in its most senior lawyer to review the group's work with Enron because it feared that its executives might have "crossed the legal line".

The action shows the depth of concern felt by McKinsey's managing partner, Rajat Gupta, about the consultancy's long-standing and lucrative relationship with the failed energy giant.

McKinsey had worked with the oil group for more than a decade, picking up at least $100m (£70m) in fees. Jeffrey Skilling, the Enron director behind many of its controversial financial dealings, joined the group from McKinsey where he was a partner.

In an interview with Business Week, published tomorrow, Mr Gupta reveals how concerned he was about the collapse of Enron. He sent the consultancy's chief legal counsel to McKinsey's offices in Houston last December to review the work it had done for Enron.

According to Mr Gupta, there were no shredded documents and nothing to show that McKinsey had worked on any of the off- balance-sheet financing that hid hundreds of millions of dollars of debt.

"In all the work we did with Enron, we did not do anything that is related to financial structuring or disclosure or any of the issues that got them into trouble," said Mr Gupta.

McKinsey is the world's leading strategic consultancy but has recently been linked with a number of high-profile failures, such as Swissair, Kmart and Global Crossing.

In the UK it is best known for its work with the BBC and Kingfisher. It has provided a number of senior advisers to the Blair Government, including two members of his "blue sky thinking" team, Nick Lovegrove and Adair Turner.

The Conservative Party is also closely linked with McKinsey. Both its former leader, William Hague, and its former environment spokesman, Archie Norman, were partners in the firm.