How the Fagin row unfolded

Labour's most controversial posters emerged on the party's website two weeks ago to a chorus of amazement.

One portrayed Michael Howard as a black-cloaked figure swinging a watch on a chain. The image was reminiscent of a Shylock or Fagin figure - both stereotypes of Jews.

The second portrayed the Tory leader and the shadow chancellor Oliver Letwin, who is also Jewish, as pigs - animals considered unclean by observant Jews.

The posters became the centre of huge controversy after the Evening Standard broke the story and reported exclusively concerns that the posters had racist undertones.

The row led to deep consternation in Labour's ranks and, it now appears, a serious breach of trust between the Labour Party and its advertising agency TBWA.

The Board of Deputies of British Jews, which has close links with the Labour Party, approached the party informally to say it considered the posters completely unacceptable.

One senior member of the board told the Evening Standard today: "These images have caused immense anger in Jewish communities."

Initially the finger of blame was pointed at TBWA and its controversial boss Trevor Beattie, the man who devised the FCUK campaign for the French Connection fashion chain.

But the Standard learned that TBWA executives were complaining bitterly that the real author of the posters was Alastair Campbell, the former No10 spin chief who led the Government's attack on the BBC during the David Kelly tragedy.

A spokesman for the agency said: "Our understanding is that Alastair Campbell is taking full responsibility for these executions." A Labour Party spokesman refused to deny that Mr Campbell, now back on the front line of Labour's campaign as head of strategic communications, was personally responsible for both posters.

The spokesman said: "We take political responsibility for everything we do. I'm not going to get into a discussion about who, individually, did what." BBC Newsnight presenter Michael Crick followed up the story, which appeared exclusively in later editions of this newspaper yesterday, and asked for a statement from Mr Campbell.

What he got back was the email telling him to "f... off".