Fayed's 'nightmare' Reform

Mohamed al-Fayed, the owner of Harrods, was approached a week ago to fund a new political party for Britain, a senior aide said last night.

Stewart Steven, the former editor of the London Evening Standard who now heads Mr Fayed's new media venture, Liberty Publishing, said: "It is true, someone did present a proposal Mr al-Fayed should fund a new political party." However, he said, it was impressed on Mr Fayed "that this is not America" and that tycoons do not form political parties here.

Mr Steven was responding to the disclosure in the Independent that Mr Fayed was considering forming a party under the working title, The Reform Party. Mr Fayed's spokesman, Michael Cole, yesterday denied he planned to launch a party or had earmarked pounds 23m to field candidates at the next election.

Others in the Fayed circle insist the idea was still being canvassed. A long-time associatewho did not wish to be named said the Independent report was accurate and it was a matter of regret that his plans appeared to have been shelved, possibly owing to the leak to the media.

In a letter to the Independent, Lord Lester, the Liberal Democrat, who is a political influence on Mr Fayed, distanced himself from the notion of a new party. He urged him to support the Liberal Democrats.

Mr Cole said the Independent story was based on an internal note, which "listed a number of desirable reforms which could be calculated to have a beneficial effect on the way in which this country conducts its political life". Mr Steven confirmed that the document came from Mr Fayed's office and that it set out "a programme many people would support".

The paper advocates:

A Freedom of Information Act;

A Bill of Rights;

A Scandinavian-style mon- archy;

Abolition of the House of Lords and its replacement by an elected second chamber;

Referendums on devolution for Scotland and Wales, and renationalisation of the privatised utilities.

Most of those policies are also Liberal Democrat policies. "He's been saying all these things for a long time," said Mr Steven. That did not mean, he added, that Mr Fayed was about to form a political party. He refused to name the people who recently had approached Mr Fayed for funding.

The long-time associate of Mr Fayed's said the document was "a manifesto that flows from long-held concerns of Mr Fayed". It did not include reform of the citizenship laws, which Mr Fayed feels strongly about, as he has been consistently denied British citizenship, despite having lived here for many years.