Jowell linked to husband's 'bribery' scandal

Gus O'Donnell, the Cabinet Secretary, will decide this week whether to launch an investigation into Ms Jowell's activities after the Conservatives demanded an inquiry into any conflict between her husband's financial affairs and her ministerial duties.

The culture secretary, 57, a close ally of Tony Blair, found herself embroiled in the bribery allegations against her husband David Mills, after it emerged she co-signed a mortgage agreement at the heart of the claims of wrongdoing brought by Italian prosecutors.

The revelations came as the Milanese magistrate leading the investigation into Mr Mills, an international lawyer, said he expects to present a criminal indictment against the Briton within 10 days.

The presence of Ms Jowell's signature on the property loan, which Italian investigators allege was used by Mr Mills to bring a £350,000 "gift" from Silvio Berlusconi to the UK, was seized upon by the Government's opponents.

It is alleged by the Italians that the mortgage, raised on the £700,000 house owned by Ms Jowell and her husband in Kentish Town, north London, was used by Mr Mills, 61, in a complex transaction to obtain the proceeds of a bribe from Mr Berlusconi to give false evidence during two fraud trials against the Italian prime minister. Mr Mills denies any wrongdoing.

Ms Jowelldenied any impropriety over the home loan as Cabinet colleagues rallied around her.

Theresa May, the shadow leader of the Commons, wrote to Sir Gus late last week calling for a ruling on whether Ms Jowell had breached the ministerial code on private interests not interfering withduties.

Ms May said: "I don't now what [Tessa Jowell] knew about those financial transactions. But all I'm asking is has the ministerial code been adhered to ... in relation to any requirement to notify in relation to financial transactions."

The scandal surrounding Mr Mills had until this weekend been focused solely on the multi-talented lawyer rather than his wife.

The corporate law expert is claimed by Italian investigators to be the "architect" of a series of offshore accounts and companies created on Mr Berlusconi's behalf in the late 1980s to avoid paying taxes.

It is alleged that Mr Mills accepted the six-figure payment in return for giving evidence favourable to the Italian politician and tycoon during two trials for tax evasion in which Berlusconi was acquitted. Mr Mills admits receiving the £350,000 but has withdrawn a statement saying it was received from the Italian prime minister in 2000 via an intermediary. He claims the money was received from a Neapolitan shipping magnate.

The lawyer has always insisted that his wife had no involvement in the dealings. But documents leaked to The Sunday Times show that Ms Jowell, using her married name of Tessa Mills, was a co-signatory on a loan worth about £408,000 in 2000 secured against the Kentish Town house.

The loan was repaid within a month using, say Italian investigators, the £350,000 from Mr Berlusconi after it was filtered through seven bank accounts into an offshore hedge fund.

Ms Jowell insisted yesterday that there had been no conflict of interest in her signing the mortgage. She said: "I am satisfied that no conflict of interest arose out of this transaction in relation to my ministerial duties."

Key questions

* At the time of the loan agreement in September 2000, Mr Mills had already been questioned by Italian investigators. Should Ms Jowell have done more to ensure the transaction was unconnected to this matter?

* What information has Ms Jowell provided to her officials in the Department of Culture, Media and Sport now the transaction is part of a criminal investigation?

* Have any Government resources, including the use of DCMS officials, been deployed in dealing with the allegations?

* What steps did Ms Jowell take to satisfy herself about the origins of the money used to pay off the £408,000 home loan from Hambros Bank?

* Have any questions of media ownership or regulation involving companies owned by Mr Berlusconi been dealt with by Ms Jowell's department since September 2000?

The quotes

"I signed a charge over our jointly-owned home to support a loan made to my husband alone by his bank. I am satisified that no conflict of interest arose out of this transaction in relation to my ministerial duties." - Tessa Jowell, Culture secretary

"Our finances are totally separate. She has no involvement in this ..." - David Mills, 19 February 2006

"If I say to her that I am borrowing money for the short term ... she trusts me enough to know I am doing what I say I am doing." - David Mills, 26 February

(On submission of evidence to Mr Mills' solicitors) "20 days from February 16, I will go before a judge to ask that he indict Mr Mills. If the judge accepts that, a trial date will be fixed within 30 days." - Fabio De Pasquale, Italian investigating magistrate

"The question is has there been any breach of the ministerial code? I think the question that is difficult to know from what we see in the papers is how much [Tessa Jowell] actually knew." - Theresa May, shadow leader of the Commons