Tobacco sleaze allegations throw Labour on the defensive

The controversy over the Government's decision to exempt Formula One from a ban on tobacco advertising grew with Paddy Ashdown demanding an investigation. Kim Sengupta and Colin Brown examine the Government's attempts to fend off allegations of sleaze

Allegations of sleaze have inflicted the first scratch on the shiny teflon premiership of Tony Blair. The row over Formula One and tobacco sponsorship moved up another gear yesterday with the Liberal Democrat leader's demand that the Parliamentary standards watchdog investigate financial links between senior figures in motor racing and the Labour Party.

It came after revelations that a leading lobbyist for Formula One fighting a ban on tobacco sponsorship, Max Mosley, was a member of the Labour-supporting Thousand Club, and had donated "between pounds 1,000 to pounds 5,000" to the party coffers. There was also uncorroborated reports that Bernie Ecclestone, owner of Formula One Holdings, the television company which owns the rights to the sport, had paid money into a "blind trust" funding Mr Blair's office in opposition. A third leading figure in the sport, David Ward was a once a researcher for the deceased Labour leader John Smith.

If anyone had any doubts about how seriously Labour was taking this, the Prime Minister's closest adviser, Peter Mandelson, himself intervenes in the affair with an article in this newspaper today.

Mr Mandelson maintains that Formula One is in a unique position with tobacco sponsorship representing 90 per cent of all the industry's sponsorship. A ban would have led to the sport moving to the Far East. He said: "We decided therefore that we would take the best practical step to secure our objectives. The EU directive on this simply will not work. We are pursuing actions that will".

For the Tories, this was the first real scent of blood after five months of frustration. But it was Paddy Ashdown who took the lead yesterday in demanding an official inquiry by Lord Nolan's committee on standards in public life.

The Liberal Democrat leader said on LWT's Jonathan Dimbleby Programme: "This is a serious issue ... the core question is: what are the facts behind this? There is now a mechanism for getting that out. It's the Nolan mechanism".

John Redwood, the Tory industry spokesman, said: "Why have they broken their promise? They clearly stated they were going to rule out this sponsorship ...they haven't and we want to know why. Then we want to know whether all sports had equal access to [ministers] ... I'm not making any specific allegations about individuals ... but we do need to know how they came to this decision, who influenced whom and why, and did everybody have a fair crack of the whip?".

Mr Blair was dragged into the row yesterday after claims that it was his decision to exempt Formula One from the ban on tobacco sponsorship. Tessa Jowell, the Public Health Minister, whose husband, David Mills, was a legal adviser and former director of the Formula One company, Benetton Formula, had in fact wanted the sport included in a sponsorship ban.

According to Labour sources, Mr Blair's decision on exemption was guided by a meeting on 16 October at Downing Street with Mr Mosley, president of the Federation Internationale d'Automobile, and Mr Ward, director-general of the organisation and Mr Eccleston.