Porter pays out £12m

A £12 million payment by Dame Shirley Porter to settle the homes-for-votes scandal is today at the centre of a growing controversy - investigators believe she may have surrendered only half her fortune.

Today victims of her regime demanded she repay more of the £42million she owed after being found guilty of wilful misconduct during the gerrymandering scandal in the late Eighties.

As a result of her policies, hundreds of vulnerable people were forced into two cockroach-infested and asbestos-ridden tower blocks because 500 good-quality council homes a year were being sold to people likely to vote Tory. This was to ensure that control of Westminster City Hall remained in the hands of the Conservatives in the 1990 elections and prevent Labour from using it as a platform to embarrass the Tory government of Margaret Thatcher.

Westminster has accepted an offer of £12.3 million from Dame

Shirley, 73, who now lives in Israel, to bring to an end a 15-year legal battle to hold her financially liable for illegal policies the council pursued between 1987 and 1989.

Initially surcharged £31.6 million, the amount has grown as a result of interest and legal fees.

Council deputy leader Kit Malthouse said the deal was good value as it exceeded the £8 million to £9 million that lawyers could be sure belonged to Dame Shirley.

He said £12million "represents a very, very sizeable proportion of her wealth". The council would have £7 million to invest in affordable housing once legal costs were paid, he added.

The settlement has to be ratified in court in the British Virgin Islands but has been approved by the Audit Commission, the local authority watchdog.

However, the Evening Standard understands that Dame Shirley's fortune may be as great as £24 million, though it is unclear how much can be directly attributed to her and not her husband Sir Leslie, 83, and other family members. Earlier this year Westminster succeeded in securing court orders freezing off-shore trusts worth about £30 million. The resulting cash- f low difficulties are thought to have prompted Dame Shirley's offer to settle.

But Jonathan Rosenberg, who led a tenants' campaign to expose her policies, said: "The crowning evil of this is that Dame Shirley and her hangerson were using the poorest people in society as cannon fodder. It was such an abuse of power."

In a statement, Dame Shirley said the time was right to bring the case to an end "despite my belief that I did nothing wrong".