Mills embroiled in sanctions-busting row

The fall-out from the affair of Tessa Jowell's husband David Mills widened last night after he became embroiled in allegations over attempts to breach UN sanctions on the sale of aircraft spare parts to Iran.

The Culture Secretary will face questions in the Commons on Monday and will be placed under intense pressure to make a statement to MPs on her husband's labyrinthine business connections which led to calls for her to resign.

The full extent of Mr Mills's business connections is only now becoming clear, as it emerged that the international corporate lawyer was listed as a director or company secretary for 46 businesses. The sheer scale of his commercial involvements has raised fresh questions about Ms Jowell's declarations of her spouse's financial interests under the ministerial code of conduct. Ministers are required to disclose any financial dealings of a spouse that could cause a conflict of interest.

Mr Mills's other interests include financial "intermediation" for Saint James Capital Ltd, a company set up in January last year with an Iranian lawyer, Shahan Shirkhani; Magnoglide Ltd which holds investments in European companies; and Mayfair Corporate Services Limited, a company privately owned by Mr Mills, specialising in secretarial support for businesses.

Mr Mills was a key player in a trading firm which dealt with Iran in 2003, when the Iranians were trying to buy BAe Systems RJ146 passenger jets but they were stopped by a strict American embargo because they were fitted with US-built engines.

His involvement sparked controversy after it was disclosed he had sought the help of a close family friend, Baroness Symonds, who was then a Foreign Office minister, over the trade restrictions that prevented the sale of jets or aircraft parts to Iran. The Government had hoped that the controversy had died down.

But the allegations resurfaced last night after Michael Ancram, the former shadow Foreign Secretary, tabled a Commons question for the Chancellor, Gordon Brown. Mr Ancram asked the Chancellor whether the Government has carried out an investigation during the past three years "into the dealings of Mr David Mills in connection with the sale of aviation spare parts and equipment to Iran in contravention of the UN and European Union trade sanctions".

The move underlines the determination of some Tories - in spite of David Cameron ordering his Shadow Cabinet to pull their punches - to bring Ms Jowell down. If they succeed, it would inflict serious damage on Tony Blair. Ms Jowell is one of his closest allies in the Cabinet.

Mr Blair cleared her yesterday of breaching ministerial rules for failing to tell her permanent secretary of a payment, allegedly by Silvio Berlusconi, of a £350,000 "gift" to her husband for helping the Italian Prime Minister to avoid fraud charges in Italy.

However, her claims that she was kept in the dark for four years about the money, and the disclosures that they repeatedly re-mortgaged their two homes to raise cash for investment in Mr Mills's extensive off-shore hedge funds is using up her store of goodwill among Labour MPs.

A mortgage company appeared also to contradict her assertion that she had not known that the "gift" had paid off their first loan on their Kentish Town house in London. The firm said they had obtained a £625,000 loan in 2000 and a second loan on the house of £250,000 two years later. She had co-signed the forms for both mortgages.

The Iran connection first surfaced in 2003 when Mr Mills approached Baroness Symonds at a dinner party and she urged him to "tread carefully" with the US in a private letter that was later leaked. She wrote: "Given the obvious political sensitivities you will need to tread very carefully with this one. This is a difficult time to be raising Iran policy in Washington. The advice I have been given, with which I am inclined to agree, is that our official support for you with the administration would raise the profile of the case and, by so doing, increase the chance of eliciting a negative response."

She added: "So you will need to think very care fully about a lobbying strategy calibrated to achieve the right result. I am pleased that Allan Flood [the BAe director] will be in Washington next week and that he will be calling on the embassy to discuss this further. They are best placed to advise on next steps."

There was no evidence that Mr Mills had broken the US trade embargo. He denied Opposition claims led by Mr Ancram that he had abused his privileged position, as the spouse of a cabinet minister, to further deals with Iran.

However, it has now emerged he has traded on his connection to Mr Blair to try to boost his business elsewhere abroad. Mr Mills complained to financial authorities in Dubai when he had been refused permission to practise there, writing that "I have the support and sympathy of very many people in public life, from the Prime Minister down".

The Dubai Financial Services Authority - a financial watchdog - accused Mr Mills of six breaches of Dubai's application procedures. These include an allegation that he gave false answers, including denying he had been involved in any firm that was subject of an investigation into allegation of misconduct or malpractice. At the time, he was being pursued by the Italian prosecutors over his links with Mr Berlusconi.