Rover inquiry will put Blair in frame

A TELEVISED public inquiry into the collapse of MG Rover is being demanded by Chancellor Gordon Brown. It would turn the spotlight on the involvement of Tony Blair in the disaster.

Mr Brown is determined to find out what went wrong with the company, which was relaunched with the personal blessing of the Prime Minister five years ago.

As well as ascertaining whether there is any truth to claims that £400m has 'gone missing' from the firm's accounts, he wants the precise circumstances of the firm's sale to be explored.

But those questions could prove particularly uncomfortable for the Prime Minister who, with then Trade Secretary Stephen Byers, approved the sale to the Phoenix consortium, which has presided over the demise of the company, the loss of 5,000 jobs and the scandal of directors' huge bonuses with allegations that millions may be missing from company funds.

Yesterday Mr Blair was asked twice about the collapse of Rover but pointedly refused to answer, insisting they were questions for Trade Secretary Patricia Hewitt.

Mr Brown is understood to have been pressing Ms Hewitt to use her powers to appoint inspectors-with wide-ranging authority to examine what went wrong.

The legislative inquiry would involve MPs grilling Ministers and key businessmen involved in the ill-fated company, and could be broadcast live, according to senior Whitehall sources.

Mr Brown wants three main questions answered about the Rover debacle, and the inquiry to have powers to summon witnesses and demand documents.

A source said: 'We want to know, first, why the original decision was taken in 2000 to sell Rover to the people who have now presided over its collapse.

'Furthermore, we need to find out what went wrong during the five years in which they have been in charge. But perhaps most importantly, we need to discover where the money has gone.'

Rover, originally Austin Rover, was sold to the German car maker BMW in 1994, but only six years later BMW wanted out and put the company up for sale.

Stephen Byers, one of Mr Blair's closest political allies, turned down an offer from venture capitalist John Moulton, who believed that only the MG sportscar brand could survive and proposed shutting the Rover part of the business. Instead the Government backed Phoenix.

Yesterday Mr Blair, asked why he and Mr Byers had backed the Phoenix bid, said he had nothing to add. But he added: 'One thing I would say is that the five years have, in fact, given us the opportunity to diversify the suppliers so the effect on the suppliers is not nearly as serious as it otherwise would have been.'