Labour donor gave £50,000 in weeks before vaccine deal

The controversy over the Government's links to big business reignited last night when drug tycoon Paul Drayson admitted making a £50,000 donation to Labour just weeks before being asked to undertake an exclusive £32m vaccine contract.

PowderJect Pharmaceuticals, of which Dr Drayson is chief executive, was approached in January by the Department of Health to supply 20 million smallpox vaccines to guard against terrorist attack.

The company was awarded the deal three months later without any formal competitive tendering process despite protests from rivals that they were not properly considered.

However, the millionaire revealed yesterday he had made a £50,000 donation to the Labour Party, his second in two years, last December. Dr Drayson defended his actions after his gift was made public in the Electoral Commission's latest quarterly summary of all donations to political parties.

The Tories seized immediately on the revelation, but the Department of Health stressed no officials or ministers had been aware of the new donation when deciding on the contract.

Fresh claims of "cash for access" erupted last month when it emerged Dr Drayson's company had been awarded the vaccines contract exclusively.

Downing Street at the time defended the highly unusual decision not to use normal tendering processes on the grounds of "national security", because the vaccines were needed to combat a terrorist threat in the wake of the 11 September attacks. It also claimed rival firms could not make the particular vaccine strain needed in time and claimed they would have had to manufacture it outside the UK.

But since then, both the National Audit Office and a House of Commons committee have confirmed they will be investigating the secret contract.

It has also been revealed that PowderJect itself will initially be acting simply as an intermediary for a Danish-owned drug firm in Germany.

The Prime Minister's official spokesman stressed yesterday there was no impropriety in the award of the contract and repeated that the deal had been approved by Sir Nigel Crisp,the Permanent Secretary of the DoH, and not ministers.

The DoH confirmed that once officials had realised Dr Drayson was already a Labour donor, the matter was referred up to Sir Nigel. However, a spokesman added: "Neither officials nor ministers were aware of a second donation."

Dr Drayson issued a statement denying any link between the gifts and the contract and rejected claims he had used his contacts with politicians as chairman of the BioIndustry Association. "I want to state categorically for the record that there has never been, nor will there ever be, any connection between my donations, which are made in a personal capacity, and my business life.

"PowderJect has acted entirely properly throughout the bidding process and I am proud that the company won this important contract," he said.

A Labour spokesman said: "It is absurd that those who give money to sustain our democratic society should be attacked by innuendo and slur. The allegations are completely without foundation."

The latest figures also showed that Lord Sainsbury, the Under-Secretary of State for Science, donated £2m between January and April, by far the largest gift of the £3.3m received by Labour. The Tories received £2.7m and the Liberal Democrats £236,000 in the same period.