Blair - pressure over Asian links

Opposition MPs put fresh pressure on the Government today to disclose any links between the steel company at the centre of Labour's latest sleaze row and former Cabinet minister Peter Mandelson.

Welsh Nationalists want to know whether Mr Mandelson had meetings with representatives of LNM Group before its boss, steel tycoon Lakshmi Mittal, personally donated £125,000 to Labour. The donation was swiftly followed by an intervention from Tony Blair, who wrote to his Romanian opposite number backing a £300million deal which saw LNM buy Romania's biggest steel plant.

Downing Street angrily insisted there was no impropriety in the affair despite Tory and Welsh Nationalist claims that LNM's activities triggered job losses at rival British Steel.

Nationalists believe Mr Mandelson met LNM group chiefs when he was trade secretary in 1998.

Downing Street is about to announce the outcome of Sir Anthony Hammond's inquiry into the "cash-for-passports" affair, which forced Mr Mandelson's Cabinet resignation last year.

Mr Mandelson pushed for the inquiry to be reopened after claiming to have unearthed fresh evidence which backed him over his links with the Indian Hinduja brothers, who donated £1million to the Millennium Dome and had their British citizenship applications fast-tracked.

Many at Westminster believe Mr Mandelson is hoping for another Cabinet comeback.

The latest row is potentially embarrassing for Mr Blair, who wrote to Romanian premier Adrian Nastase last July, shortly after the 26 June date of Mr Mittal's £125,000 Labour donation. Today Downing Street declined to give any details of any meetings between ministers - including Mr Mandelson - and LNM bosses, citing "commercial confidentiality".

Mr Blair's official spokesman said the Prime Minister and Mr Mittal had never met onetoone but could not rule out their having bumped into each other socially.

The spokesman tried to distance the Prime Minister from the affair, claiming the letter supporting the steel deal had originally been the idea of Britain's ambassador in Bucharest.

It had been endorsed by the Foreign Office, which had drafted the letter, and Mr Blair had spent "no more than 30 seconds of his time" signing and returning it unaltered, he said.

Downing Street repeated its line that Mr Blair had not known the company he was supporting had been a Labour donor and insisted the Prime Minister was "not embarrassed" by promoting LNM's interests.

However, there were major doubts over how British LNM is. Of the 125,000 people who work for the group, fewer than 100 work in London.

The company is registered in the Caribbean tax haven of the Dutch Antilles. Mr Mittal lives in London but has an Indian passport.

Opposition anger over the row grew today when Corus, formerly British Steel, announced a companywide pay freeze. The Tories called on Mr Blair to show the same support for Corus as he had for its largely overseasbased competitor.

? MPs will debate, on Wednesday, proposals to suspend Labour MP and former minister Keith Vaz from the Commons for a month, for serious breaches of the House code of conduct.