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Revealed: How Blair and Byers fast-tracked Grand Prix by-pass

Tony Blair and Stephen Byers intervened to push forward the building of a new bypass near Silverstone in time for this year's British Formula 1 Grand Prix, in contravention of Whitehall advice that the accelerated scheme was not value for money.

Mr Byers, the former Secretary of State for Transport, personally approved an extra £8m emergency pay-out to speed up a new link to the race circuit, even though he was warned by Sir Richard Mottram, the most senior civil servant in his department, that the decision could not be justified.

It was taken despite a damaging row in 1997 in which Labour was forced to return a £1m donation from the Formula 1 boss Bernie Ecclestone, after it emerged that ministers had argued for an exemption for the sport from a Europe-wide tobacco advertising ban.

The new road link to Silverstone was opened in time for the Grand Prix earlier this month but has now been closed to enable contractors to finish the road.

A letter seen by The Independent shows that Mr Blair had given Formula 1 a private guarantee that the new bypass would be built in time for the race.

It has emerged that Mr Blair's "commitment" to link the track to the neighbouring M1 and M40, part of a £56m project, would be completed in return for a pledge from the sport's governors that they would not pursue threats to scrap the British Grand Prix.

However, the project was dogged by delays because of the foot-and-mouth crisis and looked set to miss the deadline. This prompted ministers to agree to spend the extra £8m.

Sir Richard Mottram told Mr Byers that the extra cash injection could breach normal financial criteria. He told Mr Byers in a memo that accelerating the work could not be justified on normal transport policy grounds.

But Mr Byers took the highly unusual step of approving the spending because he felt the move would serve the wider national interest.

Yesterday opposition MPs reacted angrily and said the decision was a "scandalous" use of taxpayers' money and accused the Government of giving Formula 1 special favours.

"This is one of the most expensive race weekends a British Prime Minister has paid for and of no obvious benefit to ordinary people. It's frankly scandalous that £8m has been spent helping Silverstone get round Treasury rules and all the advice of the most senior civil servant," Edward Davey, the Liberal Democrat treasury spokesman. "Despite the fiasco with Bernie Ecclestone this Government has no sense of shame. The Grand Prix would have gone ahead anyway this year without this pay-out."

The letter giving the go-ahead to the scheme, written by Mr Byers to Tim Matthews, chief executive of the Highways Agency, and dated 28 February 2002, describes work being "accelerated to provide two new lanes of the Silverstone bypass, in time for the British Grand Prix". "This will cost an additional £8.064m which will not represent value for money against conventional Highways Agency criteria," it said.

He refers to a minute sent by Sir Richard, which the Department for Transport said last night "found that on transport policy grounds alone there was no justifiable reason to accelerate the work". "He [Sir Richard] recognised there were wider issues so he put the decision to the Secretary of State," a spokeswoman said.

Mr Byers, who resigned in May, noted in his letter that Mr Blair had personally assured Formula 1's governing body, the FIA, that the road would be completed to stop a repeat of terrible traffic and parking problems which had dogged previous events.

Downing Street last night admitted that the Government had been working with Formula 1 to keep the Grand Prix in Britain and said that Mr Blair had written to Max Mosley , the FIA president, expressing the Government's intention to act. It said that other ministers had met racing bosses about Silverstone but denied the Government had done a deal with the industry.

A Downing Street spokesman said: "There's a long standing commitment to improve the roads in the area. There's no question of a deal. The Government has been working with Formula 1 on these issues."

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