Labour rejects inquiry into SFO

THE LABOUR Party yesterday opposed an inquiry into the Serious Fraud Office over fears that it would prejudice the case against Asil Nadir, the fugitive Cypriot businessman and a major donor to Conservative Party funds.

Labour officials said they also feared the controversy over the SFO would obscure their demands for the Tory party to return the pounds 440,000 it received from Nadir and to open their accounts to scrutiny.

The pressure on the Tories to return its Nadir donations was increased by Labour's national executive committee, which agreed to repay the pounds 11,000 it received from Charilaos Costa, another fugitive Cypriot businessman wanted on fraud charges.

Nadir's pounds 440,000 donation to the Conservatives is still being pursued by Touche Ross, the joint administrators for Polly Peck, Nadir's collapsed business empire. Labour's refusal to support an inquiry into the SFO caused a reversal of roles on law and order for Labour and Tory MPs. David Mellor, the former minister responsible for the legislation setting up the SFO, led Tory backbench MPs in supporting Mr Mates's call for the inquiry into the SFO.

'Michael Mates is a very experienced member of Parliament; he was the first to blow the whistle on the Community Charge; he's been right about some things; he plainly believed absolutely passionately that something had been wrong in the handling of the Nadir case,' he said.

Paul Boateng, the Labour spokesman on the Lord Chancellor's Department, said he feared an inquiry would make it more difficult to bring Nadir to justice. 'I am concerned that the cloud of suspicion that has been raised by the Mates affair should not obscure the central task of the SFO, which is to bring this man to justice.

'He is a fugitive from justice. He has paid large sums to the Conservative Party. He must not for one moment believe that will buy him anything, that he will escape justice . . .'

Alistair Darling, Labour spokesman on City affairs, said: 'So far there is not a shred of evidence that would entitle us to call for a public inquiry.'

The Speaker's rules may be tightened up following the unprecedented Commons scenes when Betty Boothroyd, the Speaker, repeatedly confronted Mr Mates during his personal statement.

Senior Conservative MPs said yesterday they would be asking the Commons procedure committee to change the rules to ensure that all resignation speeches are submitted to the Speaker for prior vetting.