Delay on BCCI report attacked

THE PRIME MINISTER was accused of seeking to avoid political controversy last night after Government sources confirmed that an inquiry report into another financial scandal was likely to be delayed until after the Commons has risen for the summer recess.

The report on the Bingham inquiry into the role of ministers and the Bank of England in the handling of the collapse of the Bank of Credit and Commerce International is due to be delivered to Downing Street, but the Government response is likely to be delayed for some weeks. A Government source said: 'There are two financial timebombs ticking away. Ministers will want to get the Imro report (the Investment Management Regulatory Organisation report on Maxwell pensioners) out of the way before the Bingham report. That means it is highly unlikely to be before the recess.'

Brian Sedgemore, a Labour member of the cross-party Commons select committee on Treasury affairs, said: 'It would be an outrage if it was held up until Parliament was not sitting to make it impossible for MPs to questions Ministers. It is one of the most damaging financial scandals reaching to the heart of the operations of the Bank of England and the political judgement of successive Chancellors, including the Prime Minister.'

The Prime Minister and other ministers have given evidence to Lord Justice Bingham. They have faced allegations that they failed to act on warnings that BCCI was in difficulty and involved in illegal activities until it was too late.

BCCI was closed down by the Bank of England on 5 July last year, with deposits in its 25 UK branches frozen, after a report by the bank's auditors Price Waterhouse revealed evidence of substantial fraud. The Prime Minister denied any knowledge of serious fraud at BCCI before 28 June 1991. The findings of the report will be published, but it is likely the evidence will remain confidential.