Peer fuels Tory funding row: McAlpine questions wisdom of pursuing former Nissan UK chief accused of tax fraud

THE CONTROVERSY over Tory party funding was fuelled yesterday when Lord McAlpine, the former party treasurer, questioned the wisdom of pursuing Octav Botnar, the former head of Nissan UK, for alleged fraud totalling pounds 97m.

'At 86 years old? What do you do with a guy? If you find him guilty, do you put him in jail at 86? You spend four years trying him, and he dies in the middle. In fact, running off, he saved the nation a great deal of

expense.'

Botnar, who is in fact 79, was named in the Independent last Saturday as one who was asked to channel substantial donations through secret offshore bank accounts so they could not be identified. Lord McAlpine's views will undermine the Tories' efforts to regain control of the political agenda this week by concentrating on law and order.

The arrival of Chris Patten, the former party chairman, from Hong Kong on Wednesday will bring renewed pressure on him to answer questions about foreign donations for the Tories' general election campaign.

The Hong Kong connection is emerging as one of the important sources of funds for the Conservative Party. Last week, Mr Patten, Tory chairman from 1990 until losing his Commons seat last year, brushed aside questions about party funding as questions for the Prime Minister.

But reports persisted at the weekend that the Tories had received pounds 500,000 from a prominent Hong Kong tycoon, Li Ka-Shing; a further pounds 50,000 had been donated by T T Tsui, a Hong Kong businessman who has business links with China; that the daughters of the late Sir Y K Pao, a Hong Kong millionaire and close friend of Baroness Thatcher, are large contributors to Tory party funds; and that Mr Major hosted a private fund- raising dinner in Hong Kong.

Tory unease about these donations was underlined by Lord McAlpine, party treasurer from 1975 to 1992. He said the Hong Kong businessmen donated to the Tories 'because they hate the Labour Party'. But he conceded there was a case for insisting that donors of more than pounds 5,000 to parties should be identified. That is one of the main demands made by Labour in its evidence to the Commons Select Committee on Home Affairs conducting an inquiry into party funding.

Lord McAlpine said on BBC Breakfast with Frost yesterday: 'There is an argument for it. If Parliament decides to make it law in the future, then I am certain that the Tory party would abide scrupulously by it.'

He also said that the pounds 440,000 received from Asil Nadir should be put into a trust, but that, ultimately, the party should give it back. 'It seems quite clear where it should not stay is with the Conservative Party at the moment . . . they may have a good moral case, they may have a good legal case, but it is not a sensible case.'

Lord McAlpine, who said that during his term as party treasurer he had visited Hong Kong possibly five times, gave a warning about charitable giving in his book The Servant. 'I was thinking . . . how people get access to great figures through charitable giving. I think it is potentially dangerous,' he said.

Many MPs believe that the pressure the controversy is placing on the Conservative Party could force it to change its rules. Labour's demands, which are gaining support, include a limit on spending by the parties at national level in general elections, and the disclosure of sources of funds over a certain limit, possibly pounds 5,000 or pounds 10,000. There is limited support for a ban on donations from foreigners, but the Government has rejected Labour and Liberal Democrat demands for state funding of the parties.