So what does this mean for the Shadow chancellor?

He denies the key allegation - that he solicited an unlawful political donation - and there is no proof that he did. However, his friend Nat Rothschild, who arranged the meeting with Oleg Deripaska, insists that Mr Osborne did "solicit" a donation. In his letter to The Times, Mr Rothschild says: "George Osborne, who also accepted my hospitality, found the opportunity of meeting with Mr Deripaska so good that he invited the Conservatives' fundraiser Andrew Feldman, who was staying nearby, to accompany him on to Mr Deripaska's boat to solicit a donation."

Is his job in danger?

Probably not. As the former standards watchdog Sir Alistair Graham said: "As ever, there's no hard facts." However, Mr Osborne's judgment is being questioned and his evasive performance on live TV has undermined his reputation for candour. The Conservatives said: "Both Andrew Feldman and George Osborne deny absolutely that they attempted to solicit a donation from Oleg Deripaska." Mr Osborne now accepts that he did discuss a possible donation with Nat Rothschild, though he did not solicit it.

How is Peter Mandelson involved?

Lord Mandelson was a fellow guest of Nat Rothschild. But while Mr Osborne and his family stayed in the Rothschild villa, Lord Mandelson was given a cabin on Mr Deripaska's yacht. Back in the UK, Mr Osborne revealed Mandelson "dripped poison" about Gordon Brown. Senior Tories are convinced that today's revelations were arranged by the Business Secretary.

Why did Nat Rothschild turn against Mr Osborne?

He says he was disgusted that the Tory MP broke an unwritten privacy code. Mr Osborne's gossip became front page news after the Cabinet reshuffle and seriously embarrassed Lord Mandelson. He may have believed that Mr Osborne was responsible for a spate of stories highlighting Mr Mandelson's friendship with Mr Deripaska.

Could Oleg Deripaska donate legally?

He is barred from donating directly because he is a foreign national and not on any electoral roll. He owns the former Leyland company which, being British, could donate money in its own right. But it would be illegal to use a UK firm as a front for foreign donations. Mr Rothschild alleges: "Since Mr Deripaska is not a British citizen, it was suggested by Mr Feldman, in a subsequent conversation at which Mr Deripaska was not present, that the donation was 'channelled' through one of Mr Deripaska's British companies." The Conservatives deny this but Mr Osborne admitted that the party would advise people how to give money legally.