Labour hold Ogmore by-election

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Blair letter to Indian steel magnate was approved by two departments

Labour held the constituency of Ogmore in south Wales yesteryday, despite the storm over Tony Blair's links with the steel billionaire Lakshmi Mittal.

The controversy has been rumbling for a fortnight in south Wales – where 2,800 jobs are being axed by Corus, formerly British Steel – after the Cardiff-based Western Mail uncovered Mr Mittal's £125,000 donation to Labour.

Nevertheless, Huw Irranca-Davies was able to take the seat with a strong majority. He polled 9,548 (51 pre cent of the vote), compared to 3,827 for Bleddyn Hancock of Plaid Cymru. This represented a swing of 8.44 per cent from Labour to Plaid, on a turnout that was down 22 per cent.

Plaid Cymru forced Downing Street's admission that Mr Blair wrote in support of the expansion into Romania by Mr Mittal's company, Ispat, one of Corus's main rivals. It also uncovered the text of the Prime Minister's letter.

The Welsh nationalist party, buoyed by its successful detective work, has thrust the "Steelgate" controversy to the heart of its campaign in the Ogmore constituency. Adam Price, its trade and industry spokesman and MP for Carmarthen East and Dinefwr, said: "By breaking a British political story we have been provided with the best by-election platform we have had for decades."

He claimed the issue had dominated the final days of campaigning in the Valleys seat centred on Maesteg.

Plaid, which is desperate to break out of its north and west Wales strongholds, faced a momentous challenge to loosen Labour's grip on the seat. Its long-standing MP Sir Ray Powell, who died in December, held the seat at the last election with a 14,574 majority over the nationalists and more than 62 per cent of the vote.

Labour officials privately feared voter apathy and local fury at the demise of the steel industry would slash their margin of victory.

In Maesteg yesterday, Brian Rees, 54, a butcher, said he was switching support from Labour to Plaid for the first time. He said: "I think their candidate will do more for compensation for miners. Labour don't seem to be interested. A lot of the people I've spoken to aren't going to bother voting."