The tower was meant to celebrate the millennium but remains unfinished

The district auditor claimed in his report Leo Madden had kept quiet about a legal problem with the tower to help his party in the 2001 general election.

Mr Madden, who resigned ahead of the report, said in Tuesday's council meeting the allegation was "insulting".

He said he would talk to his lawyers to see what action he could take.

Councillors were at the meeting to discuss the vastly overspent and overdue project.

Last month two reports criticised the council's handling of the development, prompting Mr Madden, who was council leader when the plans were made, to resign.

The tower was originally planned to open in 2000 at no cost to taxpayers. But it remains unfinished and will need council funding of more than �10m.

The district auditor's report said council errors were partly responsible for the delays and cost overruns.

The auditor blamed Portsmouth City Council for entering into a contract with the developers that left them liable for extra costs and unable to enforce an end date for the building work.

It said the council had handed developers, Mowlem, a "blank cheque".

Built on Gunwharf Quays, near Portsmouth Harbour station, the Spinnaker Tower was first approved by the Millennium Commission in 1995.