Tony Blair: "Sainsbury followed the rules to the letter"

Lord Sainsbury, who earlier received the backing of Prime Minister Tony Blair, issued a statement on Tuesday outlining his business interests in a biotechnology company.

But he denied a report in The Guardian which says he owns the company that controls the patent rights over a key gene used in the food modification process.

It is the same gene at the centre of a food scare following tests on rats that were fed GM potatoes. Lord Sainsbury said the virus is owned by Monsanto.

A government minister is due to make a statement to MPs on the safey of GM foods on Tuesday at 1530 GMT.

Lord Sainsbury, a member of the Cabinet biotechnology committee, said he has not taken part in any government decisions or discussions relating to GM foods.

On one occasion when the issue was discussed at the committee he left the meeting, he said.

He said that because he was likely to a retain a "beneficial interest" in Sainsbury's he stands aside from any decisions which have a specific effect on the company.

Lord Sainsbury: No conflict of interest, says the DTI

In the statement he said he owned a patent on a biotechnology product called a "translator enhancer" but it was transferred to a blind trust along with his shares in Sainsbury when he joined the government.

The patent was declared in the register of interests at the House of Lords before becoming a minister, Lord Sainsbury said.

He did not know whether he owns the patent any longer as an independent trustee has control of the shares in the trust.

Earlier, Mr Blair said: "Let me say two things. First of all with David Sainsbury, the hounding of him is unpleasant and wrong.

BBC Political Correspondent Emma Udwin: "Mr Blair said that he won't be hounded into banning GM foods"

"There is no conflict of interest whatsoever, and he has followed the rules to the letter, as he should do.

"Secondly, with GM food, this is a new science and a new technology so we should proceed with very great care and very great caution, and with a strongly regulatory process. That is precisely what we are doing."

Mr Blair - who on Monday revealed that he ate GM food - said it was right for the government to resist the media and the "hypocrisy and total opportunism" of the Conservative Party.

The prime minister said that "to rule out GM food altogether, to impose some ban would be extremely foolish".

Christine Stewart reports on new allegations

The Department of Trade and Industry has said because of Lord Sainsbury's action there is no conflict of interest with his role as science minister.

'Outside his remit'

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The government's chief scientific advisor Sir Robert May also insisted Lord Sainsbury had nothing to do with government policy on GM foods.

But the Conservatives say it is further embarrassment for the government and reinforces the reasons why they think he should go.

Tory leader William Hague said: "The basic truth of the matter is that he is too close to that industry to be objective about these matters and we need ministers who are objective."

Mr Hague told BBC Radio 4's Today programme the prime minister should not have put Lord Sainsbury in a position where a conflict of interest arose.