The Conservative leader, Mr William Hague, has demanded an investigation into allegations that the Prime Minister, Mr Tony Blair, and the Chancellor, Mr Gordon Brown, lied about a £1,000,000 donation to the Labour Party by the Formula One boss, Mr Bernie Ecclestone.
The Ecclestone affair - it had previously threatened to embroil Labour in its own "sleaze" row - exploded afresh yesterday as the Chancellor appeared to dig in for a confrontation with fuel protesters and amid further evidence that last week's protests have slashed Labour's once-commanding lead in opinion polls.
Following Sunday's MORI poll showing a Conservative lead for the first time in eight years, yesterday's Guardian/ICM poll recorded a shock four-point lead for the Tories, with Mr Blair's personal rating the lowest for a Labour leader since Mr Neil Kinnock in 1989.
The latest poll confirmed Mr Blair's "worst week" in office, while reports continued of cabinet divisions over a general cut in fuel duties - with Mr Brown rejecting the 60-day deadline set by protesters and one of their leaders accusing him of trying to provoke further demonstrations.
Mr Blair has always insisted Mr Ecclestone's controversial donation, since returned by the Labour Party, had nothing to do with the government's surprise decision in November 1997 to exempt Formula One from a ban on sports sponsorship and advertising by tobacco companies.
No 10 Downing Street yesterday dismissed the claims of a cover-up contained in Mr Andrew Rawnsley's book, Servants of the People. It repeated the line that authors make sensational claims to sell books and secure serialisation deals with newspapers.
However, Mr Hague insisted the claims by Mr Rawnsley - the chief political commentator of the Labour-supporting Observer - were as serious as any ever made against a serving prime minister.
Mr Rawnsley defended his claim that Mr Blair and Mr Brown feared they would be destroyed by the affair, and concealed what they knew, and when, about the donation.
Mr Hague, demanding an investigation by the Committee on Standards in Public Life, declared: "This is a very serious matter. The allegation is that the Prime Minister and the Chancellor of this country engaged in a deliberate cover-up about a £1,000,000 donation to the Labour Party. No more serious allegation has been made about a sitting prime minister in modern times than he knowingly misled the public and parliament."
The book claims that, following a radio interview in which he denied any knowledge of the donation, the Chancellor returned to the Treasury "in a red mist" and raged at staff: "I lied. I lied. My credibility will be in shreds. If this gets out I'll be destroyed."
Mr Rawnsley also claims the affair sent Mr Blair into "a very bleak period", during which he told a long-standing intimate: "This is the end. They'll get me for this."