Dame Shirley faces criminal inquiry

Dame Shirley Porter is facing criminal investigation over the "homes for votes" scandal, the Evening Standard can reveal today.

A preliminary file on charges of perjury has been presented to the Crown Prosecution Service. The allegations centre on a claim Dame Shirley made, in a sworn affidavit, that she was only worth £300,000 when she was being pursued for millions by Westminster council.

Scotland Yard is examining advice from lawyers on taking the next step of launching a full investigation into the issue. The development comes only months after Tesco heiress Dame Shirley paid £12.3 million-to Westminster in what was described as a "final settlement" to end a 15-year legal wrangle.

Dame Shirley had refused to pay a surcharge of up to £42 million imposed on her after the notorious gerrymandering scandal of the Eighties, when she was Tory leader of the council. In 1994 she was found guilty of corruption by the District Auditor. It was found that her administration sold council homes in marginal wards to re s idents thought likely to vote Tory, while moving hundreds of homeless tenants into cockroach-infested and asbestos-ridden tower blocks in safe Labour areas.

The policy - which the council called Building Stable Communities - aimed to boost the fragile Tory majority on the council in the 1990 borough elections.

In 1996 Dame Shirley and five Tory colleagues on the council - including her deputy David Weeks - were surcharged £31.6 million. But the amount grew over the years with interest and legal fees.

After a series of appeals the House of Lords ruled she had to pay.

But this year Westminster finally agreed to accept an offer of £12.3 million from her. The decision to settle caused outrage and victims of her regime demanded she repay more of the amount she owed. Now 73, she lives in Israel. Peter Bradley, who was a Westminster councillor at the time of the scandal and is now a Labour MP, said he wrote to Metropolitan Police Commissioner Sir John Stevens in April asking for an investigation into Dame Shirley's activities - particularly a signed statement she made some years ago stating she only had assets of £300,000. Mr Bradley said: "If she is not guilty of perjury there is a strong case to say that she has perverted the course of justice.

"She signed an affidavit a couple of years ago telling the world she had no more than £300,000 and then, lo and behold, she emerges to sign a cheque for £12.3 million. Most rational people would say there is something of a discrepancy here.

"Either the affidavit she swore was not the whole truth - in which case there is an argument she committed perjury - or over the years, when she knew she was liable to a surcharge of up to £42 million, she began to salt away her assets to put them beyond the reach of justice."

Labour's Paul Dimoldenberg, current opposition leader on Westminster council, said the District Auditor had also launched an investigation into a formal complaint he submitted that the council had settled too cheaply. He said: "I think if the police have identified an issue then they must investigate it."

Scotland Yard confirmed it had received a letter detailing allegations against Dame Shirley. "The matter is under consideration," a spokeswoman said.

The CPS confirmed it had been sent an initial police report. A spokeswoman said: "We have given the police some initial advice about the matter. We have not received a full file about the evidence."

Earlier this year Westminster council succeeded in securing court orders freezing assets worth about ?30 million, though the majority were held in offshore trusts. Legal sources said it would be unlikely an inquiry could uncover sufficient evidence for prosecution.