Levy 'advised Noon on loan'

Labour's chief fund-raiser advised a businessman that he did not need to inform the committee vetting his Lords nomination about a £250,000 loan to the party, the BBC reported last night.

The report said that Sir Gulam Noon originally declared the loan in papers to the committee, but following a telephone conversation with Lord Levy he was advised that he did not need to.

Sir Gulam subsequently retrieved the papers from Downing Street and submitted them again, without mentioning the loan, the BBC said. His peerage was later blocked when the loan came to light.

But the curry entrepreneur said last night that he had "done nothing wrong" and maintained that he had declared the loan in his nomination papers. In an interview with Radio Five Live, he also denied a BBC claim that he had originally offered to make a donation until Lord Levy persuaded him to make a loan, which did not need to be declared.

Police are investigating whether peerages were offered in return for financial support to parties.

Sir Gulam insisted that the money had always been intended as a loan, although this had been at the Labour Party's suggestion. He said last night: "I feel very hurt despite the fact that I give a loan and it has gone out of proportion."

Downing Street declined to comment on the matter.