Vaz faces Commons ban over sleaze

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Labour faces the prospect of being engulfed in another row over sleaze as a powerful Commons committee calls for Keith Vaz, the former minister for Europe, to be suspended from the House.

The Commons Standards and Privileges Committee is recommending that Mr Vaz be banned from the House for failing to co-operate with an inquiry into his financial affairs.

It will come as a blow to Tony Blair, who stood by Mr Vaz before the general election. The Prime Minister is seeking to disentangle the Government from the Enron scandal engulfing President George Bush, but the Vaz affair threatens to drag his Government further into the mire.

Mr Vaz was condemned by Elizabeth Filkin, the Commons Commissioner for Standards, for allegedly obstructing her inquiry into a financial relationship with the Hinduja brothers, whose role in a donation to the Millennium Dome brought down Peter Mandelson for the second time.

It would be practically unprecedented for the Commons to reject a recommendation that Mr Vaz be suspended, although it does not mean he will lose his seat.

The decision by the cross-party Standards and Privileges Committee to uphold the complaints against Mr Vaz will be seen as a successful parting shot by Mrs Filkin, who is herself in effect being sacked by the Commons.

Senior MPs on another Commons body, the House of Commons Commission, refused to reappoint Mrs Filkin who protested that she was the victim of a "whispering campaign". Her allegations led to angry exchanges with the Speaker, Michael Martin.

By upholding her recommendation, the standards committee will be seen to be justifying the system of parliamentary self-regulation, which is now under review by the Wicks Committee on Standards in Public Life.

The way that MPs appeared to stab Mrs Filkin in the back for being over-zealous in her pursuit of sleaze raised questions about whether the Commons could continue with the system of self-regulation. Some senior MPs said it was a "busted flush" and needed to be replaced by an independent judge.

Suspending Mr Vaz, who claims he is innocent,is the most serious disciplinary action that the Commons can take. It was last used against Geoffrey Robinson, the former Treasury minister, who was suspended for three weeks for misleading the Commons over a £200,000 payment from the disgraced media tycoon Robert Maxwell.

The Government has distanced itself from the Vaz affair, insisting that Mrs Filkin's inquiries were a matter for the Commons. However, Mr Blair now faces the fresh prospect of a sleaze row at home as his Government seeks to evade the mud from the Enron scandal in the United States.

Last week it claimed its first UK political scalp, when Lord Wakeham, a member of the Enron board, announced that he was suspending himself on full pay of £156,000 from the Press Complaints Commission, pending inquiries in Washington.

The Liberal Democrats have called for a Commons investigation into "cash for access" by big companies lobbying ministers. They say the Government broke its own guidelines by allowing Enron's accountants, Andersen, to sponsor a Treasury event.

The Independent on Sunday also discloses today that Mr Blair could become mired in the collapse of a second big company – the telecoms giant Global Crossing – that sought contacts with ministers on the dinner circuit.