I am not trying to organise his entry into the Labour Party

Trevor Phillips Greater London Assembly chairman

Following reports that Mr Phillips and Lord Taylor had spoken about the row on the phone, they both moved to dampen rumours that the ground was being prepared for the peer's dramatic resignation from the Tory Party.

Lord Taylor has categorically denied that his attack on Tory racism was organised by Labour.

Threat withdrawn

On Tuesday Lord Taylor appeared to withdraw his threat to resign, saying he was "not currently planning to take the matter further".

Mr Phillips, a former broadcaster, said: "I am emphatically not a conduit between John and the Labour Party.

"I am not trying to organise his entry into the Labour Party."

Mr Phillips, who has been a friend of Lord Taylor for many years, said he would be "completely happy" if the Tory's most senior black peer switched allegiance to Labour, but insisted "there is no orchestrated conspiracy, no plot, no design.

"As far as I know, John is very clear that he is a Conservative and wants to remain one unless he is driven out of the party.

"From my point of view, the most important thing for any minority person is that we should be involved in politics based not on the colour of our skins but on the nature of our beliefs."

Trevor Phillips: 'There is no plot'

John Townend had ignited the row by saying that immigration was undermining Britain's "homogenous Anglo-Saxon society".

Fellow MP Laurence Robertson had added fuel to the fire by describing his colleague's outburst as "basically true".

Tory leader William Hague was forced to extract apologies from both MPs, who have now promised not to repeat their views.

After initially dismissing Mr Hague's action as "meaningless and worthless", Lord Taylor appeared to soften his reaction, saying "I have made my point and am not currently planning to take the matter further."

But he warned the Tory leadership against complacency, adding: "I reserve my right to challenge racism from whatever quarter it comes."

Attempting to quash speculation of a Labour plot to manage his resignation he said: "It has been rumoured that my criticisms of racism within the Conservative Party have been orchestrated by the Labour Party.

"I categorically deny this.

"The views I have expressed are mine."

Election issue

William Hague's efforts to draw a line under the continuing race row has been dealt a series of blows, including a warning from former Tory prime minister Sir Edward Heath that it has become an election issue.

Sir Edward said the Tory leader "without doubt" should have expelled Mr Townend from the party, which he said was on the "extreme right".

Veteran Tory rightwinger Lord Tebbit has also added his voice to the debate, saying he did not know of any "happy" multi-cultural society.