Politics: Robinson suggested share deal to family's offshore trust

Geoffrey Robinson, the beleaguered Treasury Minister, was yesterday accused of being economical with the truth over the conduct of an offshore trust. With John Prescott hinting at hypocrisy, Anthony Bevins, Political Editor, says the Prime Minister might yet have to let him go.

In a lawyer's letter, threatening action for defamation against the Observer last Monday, it was stated on behalf of Mr Robinson, Paymaster General, that his family's offshore Orion Trust - of which he is a discretionary beneficiary - "act entirely independently of him and are not controlled, or their decisions influenced, by him in any way".

Yesterday, it was revealed that Mr Robinson had been involved in discussions with Orion before the trustees had gone on to buy pounds 10m worth of shares in TransTec, the engineering company he founded, and pounds 8m worth of shares in Coventry City Football Club.

Peter Lilley, the shadow Chancellor, said last night: "His claim that he did not influence the Orion Trust `in any way' has been shown to be false."

He added: "Over the past few days, it has become clear that the Paymaster General has been economical with the truth in public statements about his personal financial arrangements."

But in a statement last night, Mr Robinson said his position had been vindicated, and he added: "I am a millionaire and I am delighted also to be a businessman who is a minister in a Labour government, and I now want to get on with my job in the Treasury of helping to build a more successful economy."

Mr Lilley said: "We still don't know all the facts. But it is clear that Geoffrey Robinson no longer retains a shred of credibility. If he will not now resign, the Prime Minister must dismiss him." The possibility of that being forced was increased yesterday when the Deputy Prime Minister appeared to back charges of hypocrisy against his ministerial colleague.

Mr Prescott told the BBC television programme Breakfast with Frost: "I notice a number of the papers sort of saying he hasn't done anything wrong. You may argue that the politician said one thing, perhaps done another; that seems to be the greatest charge against him."

But Mr Robinson told the Sunday Express: "What is hypocrisy? Hypocrisy is saying one thing and doing another. I haven't condemned offshore trusts, but I've made it clear that whatever government policy is, I will follow it."

Mr Robinson, who put his personal wealth at pounds 30m, dismissed the attacks as "smears and mud". He said he had paid about pounds 1.4m in income tax over the last five years; he paid all his taxes in the UK; and the idea that he was "dodging tax is a bit rich".

He told the Observer: "I have many faults, but hypocrisy is not one of them." Last week's demand for an apology, under threat of libel action, appeared to have been forgotten. The Tories, however, will now be getting their teeth into two fresh pieces of meat - Mr Robinson's behind-the-scenes involvement in two Orion transactions, and the definition of "influence".

On the TransTec transaction, Mr Robinson told the Express: "A rights issue was being done and it was very important for the company. I told them I didn't have ten million quid - readies - there and then for them. They asked me would I approach ... they knew I had a family trust, would I mention it to the trust to see if they were interested."

He told the Observer: "So I suggested to the trust, `Are you interest in looking at this? It would be helpful to the family'. It would be perverse of them not to look at it. They are charged to do things beneficially for the family, even if it is at their entire discretion."

For the purchase of the Coventry City FC shares, it was reported in yesterday's Sunday Times that Mr Robinson had telephoned Derrick Robins, the former club chairman, saying he wanted to buy Mr Robins's 10,619 shares. Mr Robins agreed, and at the end of January the shares were bought by a Guernsey company which acts for Orion. Mr Robinson insists, however, that he has done nothing wrong and nothing illegal.