MINISTERS at the Department of Agriculture were accused yesterday of operating a "cosy cartel" in awarding an EU Leader contract to a company in which a Labour Party programme manager was a partner.

The accusation was made by the Fianna Fail spokesman on agriculture, Mr Joe Walsh, who told the Dail that the contract was awarded to a company in which Mr Greg Sparks, special adviser to the Tanaiste, was a partner.

However, the Minister of State for Agriculture, Mr Jimmy Deenihan, described the accusation of a "cosy cartel" as "outrageous and unworthy" and said there was absolutely no political involvement in the decision.

Mr Walsh said the contract to run the national network arrangements of the Leader II funding programme was awarded to a company which had not made the lowest tender.

He told the Dail during questions to the Minister for Agriculture, Mr Yates, and the Minister of State, that he would be referring the issue to the Public Accounts Committee.

However, Mr Deenihan said decisions on the matter were left entirely to officials of the Department and that the Minister and Minister of State stayed "at arm's length" from the assessments, which were "rigorous" and based on objective criteria".

He said seven tenders were made for the contract, ranging from the most expensive at £1.78 to the lowest bid of lower than the successful bid and they failed to comply with tender criteria.

He was satisfied that proper procedures had been followed at all times and that the tenders were examined in a thorough and objective manner.