The great and not-so-Goodman

BARON GOODMAN of Westminster was known as the greatest negotiator of his age, mediating between individuals, trades unions and governments. The veteran MP Tam Dalyell once described him as "the most resourceful man in public life". He was also, however, a thief, stealing about pounds 1m - about pounds 10m at today's value - from Viscount Portman, a family friend and a staunch Conservative.

When Lord Goodman died in 1995, the publisher Anthony Blond described him as "Britain's most distinguished citizen outside government".

As a eulogy, it was not inaccurate. At the height of his influence in the 1960s and 1970s, Lord Goodman had the ear of the prime minister, Harold Wilson, and boasted ministers among the clients of his rapidly growing legal practice.

He was chairman of the Arts Council, Newspaper Publishers' Association and the English National Opera. He was president of the National Book League, director of the Royal Opera House at Covent Garden and a governor of the Royal Shakespeare Theatre.

At the peak of his powers, Lord Goodman was Harold Wilson's lawyer, he negotiated for Edward Heath in Rhodesia and he represented Jeremy Thorpe, the former Liberal leader, in the early stages of his conspiracy to murder case. Lord Wilson wrote in his biography: "When deadlock becomes total, a telephone call is put through to Lord Goodman."

In the run-up to the 1964 election, Harold Wilson asked him to settle a threatened television strike that could have had an adverse effect on Labour's chances.

As in many other disputes afterwards, Lord Goodman installed the unions in one room of his apartment in Portland Place, central London, and the employers in another. Shuttling between the two, he hammered out a settlement.

He represented Rupert Murdoch on several occasions and introduced him to influential people as the newspaper magnate gained a foothold in the United Kingdom.

To many he was a hero, an intellectual titan who could extract the great and good from impossible legal difficulties, while to others he was an unelected villain who exercised more influence than he deserved.

What no one knew, until today, was that some of his generosity was funded from the wealth of another man - Lord Portman, the son of his best friend, Michael Portman. He met the younger Portman at the age of 17, but he abused the trust placed in him and used the young viscount's money to buy power and influence.

According to legal records and a senior member of the Portman family, Lord Goodman systematically pilfered money from Lord Portman's client account, an account to which he had been made sole trustee because of his relationship with the Portman family, one of the wealthiest in the country.

When Lord Portman tackled him over sums of money missing from the 1950s onwards, "he fobbed us off and bamboozled us with excuses", said the family member.

By 1993, however, Lord Portman had had enough. He sued his friend, demanding "delivery ... of a cash account, in relation to all transactions since 1955 to date, in which the defendants [Lord Goodman and his legal firm, Goodman, Derrick] have acted as solicitor for the plaintiff".

Further, the writ asked for all money held by Lord Goodman to be returned to Lord Portman with interest. After negotiations, however, and with Lord Goodman dying, the Portman family settled for pounds 500,000.

In the interim, Lord Portman's accountants, Littlejohn Frazer, had found evidence that large sums of money - 40 per cent of everything taken - were paid to Labour figures. However, Lord Portman, Lewis Silkin, his solicitors, and Littlejohn Frazer signed a confidentiality clause forbidding disclosure of the information for 12 years.

Therefore, the recipients of the stolen money are guaranteed anonymity until 2006.

A member of the Portman family said: "Lord Portman would wonder why he never seemed to have any money but Lord Goodman would just fob him off with excuses... He used to say Lord Portman had used it all - but in fact, Goody had. We estimate that the amount that went missing over the years would be worth about pounds 10m today. Around 40 per cent of that went to Labour people."

When lawyers and accountants won the right to examine Lord Portman's records, they found evidence that much of his money had been frittered away.

"They found the most desperately incriminating things," said the family member. "There were lists of people to whom money had been given or loaned, and many were senior Labour figures."

Lord Goodman was 81 and dying, so Lord Portman decided not to pursue the money he felt he was owed and agreed not to sully the name of the man he had looked up to as a father. He refuses to discuss the case but friends say he feels cheated and disappointed.

"We don't think Lord Goodman used the money to finance his own lifestyle," said the family member. "He spent most of it on other people, buying power and friendship and influence. He loved that sort of thing."

Lord Goodman was born Aby Goodman in 1913 into a middle-class Jewish family in London. He later changed his first name to Arnold. He was educated at University College London and Downing College, Cambridge, before training as a solicitor.

During the Second World War he served as a gunner and, as a sergeant, met Colonel George Wigg, later to become Lord Wigg, who introduced him to Harold Wilson, Hugh Gaitskell and Aneurin Bevan. Although he described himself as a "crossbencher" after being made a life baron in 1965, his leanings were always towards Labour.

When Lord Wilson formed his first government in 1964, he used to invite Lord Goodman to 10 Downing Street between 9pm and midnight once a week to discuss affairs of state. Such access - before a fall-out in 1976 - gave him huge influence in society circles and his professional life.

During one of the many crises to hit the Wilson governments, he once went to the prime minister's home in Hampstead Garden suburb, north London, to look for some papers. He let himself in with keys given to him by Lord Wilson and on returning to his office was heard to say: "Quite extraordinary, nothing in the house is worth more than pounds 5."

In his obituary of Lord Goodman, Blond wrote that three former prime ministers, Wilson, Heath and Home, once attended an anniversary of Lord Goodman's legal firm, Goodman, Derrick and Co, at its offices in Fetter Lane, near Fleet Street. Such was the extent of his influence.