Revealing code of conduct designed to prevent sleaze

The Government will launch a fresh attack on sleaze this week with the publication of a new ministerial code that is designed to prevent a repetition of the controversies that surrounded Keith Vaz and Peter Mandelson.

The new code of conduct will force ministers to reveal their financial interests to their most senior civil servants when they take office, including any links to businessmen such as the billionaire Hinduja brothers.

It will be accompanied by the inaugural code of conduct governing ministers' special advisers' and spin-doctors to prevent "bullying" of civil servants. The revised rules are framed to prevent further embarrassing revelations over ministers' financial affairs,

Ministers were required to dispose of any financial interest "giving rise to actual or perceived conflict" under the previous ministerial code. They were not required to inform the Government of their interests, although many chose to.

Under the new rules ministers have to report to their permanent secretaries any potential conflicts of interest with their role in government, including meetings with lobbyists. They will also be told to seek guidance from senior civil servants as to whether their actions contravene the code.One senior Whitehall source said: "There is serious concern that permanent secretaries will be caught up in a rubber-stamping job for ministers' conduct. Civil servants could be left carrying the can. It would be up to the minister whether he went ahead with the permanent secretaries' guidance. We need an assurance that permanent secretaries won't get embroiled."

The move responds to advice from Sir Nigel Wicks, the new chairman of the Committee on Standards in Public Life, that all meetings between the government, business and lobbyists are properly recorded.

Downing Street appeared to be "in the dark" over damaging allegations about ministers' business links during Labour's first term. It was forced to conduct its own inquiry to establish whether Mr Mandelson intervened to help the Hinduja brothers gain a passport. The Hammond inquiry findings cleared the former Northern Ireland secretary of acting wrongly in the Hinduja affair, even though he had already quit his post.

Under the new rules Mr Mandelson would have had to tell civil servants of his £373,000 home loan from Geoffrey Robinson, a former paymaster general. He only informed them when the facts were about to be revealed in the press.

Tony Blair's links to the Hinduja brothers came under fresh scrutiny yesterday because of a report that said Downing Street instructed Mr Mandelson to contact the Hindujas about a possible donation to the Dome. Downing Street has sought to distance itself from the Hinduja brothers, who are facing allegations of corruption involving an arms deal in India.

But MPs will be critical if the new code does not force Mr Blair to take responsibility for ministers' conduct. The Public Administration Committee said recently the parliamentary ombudsman should be given fresh powers to run independent investigations designed to ensure ministers were not misusing or exploiting high office.