BRITAIN: "It's not Watergate, it is Garbagegate."With these words a defiant Mr Tony Blair sought to repel a rising Tory challenge over his backing for a Labour donor whose firm won a lucrative contract in Romania.
Mr Blair said that his letter to the prime minister of Romania, endorsing the sale of that country's steel industry to the Indian tycoon, Mr Lakshmi Mittal, was "entirely justified". But the Conservative leader, Mr Iain Duncan Smith, pressed Mr Blair to say if he had known of the connection between the company and the donor of £125,000 to Labour during last year's general election.
Mr Blair insisted that the letter, sent "at the instigation of the British embassy in Romania", did not mention Mr Mittal but referred only to his company, LNM.
However, even if he had known the link, Mr Blair insisted, "it would have made no difference". He suggested the reason for this attack on so-called Labour "sleaze" was the fact that the Tory party was full of people who were either "in jail or had just come out of jail". Labour MPs roared their delight.
The questions persisted last night after Mr Blair defended his intervention on behalf of "a British company". LNM is registered in the Dutch Antilles and less than 1 per cent of its workforce live in the UK.
The next phase of the Conservative attack is certain to focus on the role played by the former minister, Mr Keith Vaz, suspended from the Commons last night for one month.
The British Embassy in Bucharest also appeared to contradict Downing Street. The BBC's World at One quoted embassy sources saying the letter had been an important factor in clinching the deal for Mr Mittal.
In 1996 LNM acquired Irish Steel, which was later wound up.