Simon to sell pounds 2m BP shares

The trade minister, Lord Simonof Highbury, announced last night that he was selling his pounds 2m shares in BP, in a climbdown to end the damaging attacks on the Government over his alleged conflict of interests.

Lord Simon made an estimated profit of pounds 350,000 since the election on his 270,000 BP shares, including a bonus of pounds 105,000 earned yesterday when BP's quarterly results were published. The trade minister said he would give the profits to charities, chosen by his wife, and the proceeds will be reinvested in a blind trust.

It was hailed as an "incredible U-turn" by John Redwood, the Tories' spokesman on trade and industry, who has kept up a relentless assault on the incompatibility of Lord Simon's role as a Department of Trade and Industry minister while holding the shares.

There was strong speculation at Westminster that the move was sanctioned by Tony Blair, who is holidaying in Tuscany, to stop further damage to the Government, which is keen to restore its confidence in time for celebrations on Friday of its first 100 days in office.

Insisting he had done nothing wrong, Lord Simon, who resigned as chairman of BP on his appointment as a minister by Mr Blair, emerged for the first time to answer questions about his controversial shareholding with a press briefing at the DTI offices in central London.

He was flanked by Peter Mandelson, the duty minister during the summer recess. It was a confident, and assured performance, ending with Lord Simon joking: "I am sure you can understand this has been a wonderful period for me." In spite of the attacks he had suffered, Lord Simon said he had no regrets about becoming a minister. But it is likely that Tory shadow ministers will pursue their criticism of Margaret Beckett, the President of the Board of Trade, for allegedly misleading the Commons over the date when Lord Simon's non-BP shareholdings in Grand Met, worth pounds 14,000, were transferred to a blind trust.

BP confirmed that the board had made a "special dispensation" to release the 40,000 shares, which would otherwise have been held in trust until next May. It was the first time the group had received such a request since the scheme began life in 1991. After announcing the company's results the new chairman, Peter Sutherland, declined to be drawn into the row beyond insisting that Lord Simon had "always acted with the highest degree of integrity."

Mr Redwood said his campaign had been vindicated by Lord Simon's decision to sell the shares. "Labour's U-turn confirms the nonsense of their attempt to bring someone into government on the basis of their expertise in the oil and chemicals industry, but then having to prevent them from dealing with issues which have a bearing on BP because of a personal financial interest."

Lord Simon had planned to sell the shares at the end of the year, but yesterday said he brought forward the sale because he was cleared of any possibility of insider trading by assurances from the chairman of BP, and by the publication of the quarterly BP results. He also disclosed that he joined the Labour Party after his appointment.

BP shares surge, page 17

Investment column, page18