Enron gave Prince's charity £800,000

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The Prince of Wales was dragged into the Enron scandal last night after it was revealed that his charity had accepted £800,000 from the collapsed US power giant.

A spokesman for Prince Charles admitted that he had lunched at the home of Enron's chief executive, Ken Lay, and had invited Enron executives to functions at St James's Palace.

During a period of intensive contact with the company in 1993, the Prince toured Enron's gas-fired power station at Wilton on Teeside, a £700m flagship project.

Enron had given the money to the Prince's Trust between 1991 and 1999, a spokeswoman for St James's palace said. "We receive money from most of the FTSE 100. There is nothing at all unusual in substantial sums coming to the trust from large companies and it is common for the Prince to meet with the chairmen or chief executives of these organisations as a way of building links."

The revelations come amid mounting evidence about the manner in which Enron bought access to Britain's highest corridors of power.

Labour is now also facing questions over its links with Global Crossing, the US telecoms giant which critics are dubbing "Enron II" after it collapsed with debts of more than £8.5bn last week.

Global Crossing is accused not only of dubious accounting, by a whistle-blowing former senior executive, and of retaining Enron's accountants, Arthur Andersen, as its auditors, but also of spending fortunes supporting and entertaining politicians.

The Enron row – which has already claimed Lord Wakeham as its first political victim – could lead to a Commons select committee inquiry into "cash for access" by firms which sponsor events to gain contact with ministers.

The Liberal Democrats are to table questions about Labour relationship with Global Crossing this week. Matthew Taylor, their Treasury spokesman, said: "Once again the Government has fallen head over heels for a company that has less than stable foundations."

He accused the Treasury of breaching the civil-service code by allowing Andersen to sponsor one of its conferences when the firm was involved in government contracts.

In the UK, Global Crossing held lavish dinners at Claridge's, where it entertained cabinet ministers, close advisers to Tony Blair and a slew of other leading politicians. At the same time, it was securing UK government contracts worth more than £500m.

Global Crossing was created five years ago by Gary Winnick, an ex-bond trader. He joined forces with Lodwrick Cook, a former chairman of the oil group Atlantic Richfield.

The business soon became the 23rd largest donor to political parties in the US, giving £2m in the run-up to the 2000 presidential election.

In the UK, it restricted its influence to entertaining politicians. In November 2000, Mr Cook hosted a lavish dinner attended by Margaret Beckett and Peter Mandelson as well as the No 10 special advisers Anji Hunter and Andrew Adonis.

The dinner came at the end of 12 good months for Global Crossing in the UK. In October 1999, it was allowed to buy Racal Telecom for £1bn. In May 2000, it won a £150m contract to build communications links for British embassies and in July, a consortium in which it was a main partner won a similar £350m contract from the Home Office.