New Hinduja blow for Mandelson

Peter Mandelson is back on the rack today with the news that the Hinduja cash-for-passports affair, which brought his downfall, is to be the subject of a new Commons inquiry.

Although the former Northern Ireland Secretary is not the target of the inquiry - and today insisted he had nothing to answer for - the reopening of the affair threatens to block his path back to high office.

The Evening Standard learned today that the powerful cross-party Public Administration Committee is to investigate charges that the Home Office and Cabinet Office deliberately blocked an investigation by Westminster watchdog Sir Michael Buckley.

Sir Michael, the Parliamentary Ombudsman, complained that he was thwarted for six months in his attempt to see key papers relating to contacts and records of phone calls made by a series of ministers - including Mr Mandelson - relating to the attempts by the wealthy Hinduja brothers to win British citizenship.

The Commons committee, headed by Labour MP Tony Wright, could summon Jack Straw and Cabinet Secretary Sir Richard Wilson for a public grilling.

Sir Michael said the Government had blundered into what looked like a cover-up. In a report published yesterday he identified Mr Straw, who was Home Secretary at the time, as one of the chief culprits in blocking the release of information. He said the Cabinet Office "appeared to be withholding papers".

Eventually the watchdog was unable to find any evidence proving whether or not Mr Mandelson made a disputed phone call at the heart of the affair which led to his resignation from the Cabinet.

Mr Mandelson said: "I think people are missing the point. The Home Office didn't disclose relevant papers because none ever existed. No papers or any evidence of any sort ever existed, in the Home Office or the Cabinet Office, to support what was originally claimed. But it's in the past, and for me its an end to the matter."

The Tories pointed the finger at Deputy Prime Minister John Prescott, in charge of the Cabinet Office since last June, and demanded that he apologise to the Commons.

Shadow Cabinet Office minister Tim Collins said: "It is increasingly clear that this Government will break any Parliamentary rule in the book to cover up its activities in the growing list of cash-for-favours scandals."

The Hinduja affair centred on an alleged phone call made in 1998 by Mr Mandelson, then Dome Minister in the Cabinet Office, to Mike O'Brien, the immigration minister at the Home Office.

Mr Mandelson, who has no recollection of the conversation ever taking place, quit as Northern Ireland Secretary in January 2001 over claims that he lobbied for a British passport to be given to Indian tycoon and Dome donor Srichand Hinduja.

After his resignation, and after former civil servant Sir Anthony Hammond began an inquiry into the affair, Sir Michael weighed in to investigate why a journalist was being refused access to documents.

Last May he wrote to the Home Office asking to inspect all the relevant paperwork. But when his staff were shown the Hindujas' passport applications, "it became apparent that several key documents detailed in Sir Anthony's report were not present".

By the end of November, Sir Michael concluded that a lack of co-operation from the Home Office and the Cabinet Office had "effectively made my investigation unsustainable".

Even a letter to Cabinet Secretary Sir Richard Wilson, the head of the civil service, produced no results. But when Sir Michael complained in a draft report of a cover-up, he was suddenly given access to some of the "lost" files. None related to Mr Mandelson.

Both departments apologised for their earlier lack of cooperation. A week later, last December, Sir Anthony was asked by Tony Blair to carry out a second inquiry into the Hindujas.

In today's report Sir Michael concludes that the Cabinet Office "appeared to be withholding papers, which they readily acknowledged existed, from my investigation. Such a refusal strikes at the very heart of my Office's function".

Liberal Democrat home affairs spokesman Norman Baker said the Ombudsman's criticisms of the Home Office and the Cabinet Office were serious. He added: "It is a very serious matter that the Cabinet Office was withholding documents from the Ombudsman. The Government should now make a statement on the Ombudsman's report."

Phone call at heart of the affair
The £1 billion brothers