Tory move for backer's peerage is blocked

MICHAEL ASHCROFT, the controversial millionaire businessman and Conservative Party treasurer, has been refused a peerage even though he was formally nominated by William Hague.

The Independent understands that Mr Hague included Mr Ashcroft, the Tories' biggest single financial backer, on a list of proposed working peers submitted to Downing Street. An all-party list of new life peers is due to be announced later this month.

The move threatens to provoke a row between Labour and the Tories, who have accused Labour of running a campaign to smear Mr Ashcroft.

It is believed that Mr Ashcroft was blocked by the Political Honours Scrutiny Committee, which vets proposals to grant political honours before they are forwarded by the Prime Minister to the Queen. The committee normally rubber-stamps recommendations by party leaders, but is thought on a previous occasion to have delayed the peerage won in 1992 by Jeffrey Archer, the millionaire novelist and former Tory deputy chairman.

The committee is chaired by Lord Thomson of Monifieth, a Liberal Democrat, and includes Baroness Dean of Thornton-le-Fylde, the former print union leader, and Lord Hurd of Westwell, the former foreign secretary.

Downing Street refused to answer questions about Mr Ashcroft. "We do not comment on any honours' list in advance of publication," a spokesman said.

Some Tory sources suggested last night that Mr Ashcroft's name had been withdrawn by Mr Hague because Downing Street was "prevaricating" over the peerage.

A Tory ally of Mr Ashcroft said: "This is all politics. Labour is attacking him. It is very unfair. All he is doing is putting his money where his mouth is. It is completely wrong to suggest he is helping us to get a knighthood or peerage or influence policy."

Mr Ashcroft, 53, is said to be Britain's 14th richest man, with a fortune estimated at pounds 1bn. He spends most of his time in Florida, and some senior Tories are worried that the party has become too dependent financially on one person.

Yesterday Mr Blair and Mr Hague clashed over Mr Ashcroft's role after the Tory leader dismissed as "total rubbish" press reports that the party treasurer was pumping up to pounds 4m a year into the party.

Tony Wright, Labour MP for Cannock Chase, asked Mr Blair during Prime Minister's Questions: "Are you aware that we still have a party which gets something like a third of its income from its treasurer, who is a tax exile in Florida and who moonlights as the Belize ambassador at the UN?" Mr Blair replied that it was "precisely for these reasons" that the Government was committed to bringing in a new law to reform the funding of political parties.

Members of the executive of the 1922 Committee of Tory MPs yesterday rejected suggestions from within the party that Mr Ashcroft should be removed from his post. Nicholas Winterton, MP for Macclesfield, said: "I am well aware that certain people hold particular views about Mr Ashcroft but I have to say I have myself never found him ... anything other than a good friend."

Despite such support, the Tory treasurer cuts a controversial figure. He keeps most of his fortune offshore and is not registered to vote at the Belgravia house that he and his wife Susie have used when they are in Britain. He is a citizen of Belize and holds dual nationality.

Last year the Government rejected Sean Connery for a knighthood on similar grounds, with senior sources saying privately that the actor, a major donor to the Scottish National Party, could not expect to receive such an honour when he did not pay British taxes.

Peter Bradley, Labour MP for The Wrekin, has demanded answers from Michael Ancram, the Tory chairman, on how his treasurer's donations can be squared with the party's new rule outlawing foreign donations. "This restores my faith in the honours system," Mr Bradley said last night. "It will be interesting to see whether he takes his chequebook away."