A Dame's Demise: Money may never be repaid as riches lie out of reach

Dame Shirley Porter, the former Westminster City Council leader, was yesterday found liable for over pounds 27m for a policy of selling council houses to likely Tory voters. But, according to Ian Burrell, the money may never be repaid.

The whistle-blower was a grey-haired GP who was appalled at having to treat the ill-health of homeless families when council properties were boarded up all around his surgery.

But in February 1988, when Richard Stone alerted the Westminster City auditor to the Conservative council's policy of selling council homes in marginal wards to people likely to be their political supporters, he can have had little idea of what he had set in motion.

John Magill, the man tasked with carrying out the inquiry, embarked on a seven-year investigation which involved 130 interviews with 44 people. Dame Shirley, the leader of the ruling Tory group, was interviewed 12 times.

He finally concluded that Dame Shirley and her colleagues had been responsible for a policy of "disgraceful and improper gerrymandering" and calculated that their actions had cost the council pounds 31m, for which they were liable. Yesterday, after a two-month appeal, three High Court judges upheld the auditor's verdict in respect of Dame Shirley and her deputy David Weeks, while clearing three colleagues of liability.

The scheme, said Lord Justice Rose, was Dame Shirley's "baby". He said that she and her deputy, David Weeks, had known that the policy was unlawful in marginal wards but had tried to disguise it by presenting it as a city- wide gentrification programme.

"Their purpose throughout was to achieve unlawful electoral advantage. Knowledge of the unlawfulness and such deliberate dressing-up both inevitably point to ... wilful misconduct on behalf of each of them."

The judges ruled that the policy had cost Westminster pounds 27m in lost rents, discounts on sales, housing the homeless elsewhere and other costs. Whether she will pay is another matter. It is believed that Dame Shirley, who now lives in Israel, has already placed her assets outside the reach of the authorities. She has resigned all but one of her directorships in Britain, sold her homes in London and reduced her shareholding in Tesco, founded by Sir Jack Cohen, her father.

Westminster has employed forensic accountants to identify assets but sources admit that even the pounds 3m cost of the inquiry might not be retrievable.

Mr Weeks, who is still a Westminster councillor and who will face calls for his resignation, now faces financial ruin unless Dame Shirley, who is a close friend and has an estimated personal wealth of pounds 70m, bails him out.