Tim Collins wants decision investigated

The deal is with British company PowderJect Pharmaceuticals, whose owner Paul Drayson donated �50,000 to Labour in July 2001, according to the Electoral Commission website.

The government said the contract award, confirmed on Friday, was not linked to the gift.

But Tim Collins MP, Conservative vice-chairman, demanded an inquiry and the establishment of a cross-party group to supervise all party donations.

"This is bound to happen until we have a proper culture of openness and a proper mechanism where we don't have to take ministers' words for it," he said.

Referring to previous 'cash-for-favours' claims, Mr Collins suggested the smallpox contract could be "another coincidence in a long chain of coincidences after Mittal, Enron and Formula One".

Decision defended

The government has strongly denied any impropriety in the award of the contract, which has infuriated rival drug producers who say they were not given a chance to bid.

Smallpox facts

Can transmit through air Kills about 30% of those infected No cure First symptoms can be mistaken for flu Officially eradicated in 1980 after global vaccination First used as weapon by British against Native Americans in 18th century

Dr John Brown is chief executive of Acambis Plc, one of several companies initially approached by the UK Government and currently manufacturing 200m doses of a smallpox vaccine for the US.

He said: "It's unlikely that anyone would be able to get a fully clinically-tested vaccine before us."

He insisted he had not been officially told Acambis had missed out on the contract.

But Health Minister John Hutton said: "The reason why PowderJect was given the contract, as we've tried to make clear, was for one reason and one reason alone.

"They were the only company which could provide the type of vaccine we wanted as quickly as possible.

"Dr Brown's company make a different strain of the vaccine and we decided, having looked at the issues very carefully, not to procure the particular strain that his company manufacturers."

Mr Hutton said advice was sought from the permanent secretary at the Department of Health, who confirmed the contract should be placed with PowderJect.

And he added that the industry could not have been told in advance of the award because of commercial confidentiality.

Culture of secrecy

But Liberal Democrat MP Norman Baker said: "We've a situation where someone who has given money to the Labour party has won a contract in less than open circumstances.

"Now part of that is the fact that the British Government, and successive governments, have an endemic secrecy at its heart.

"We are not treated like adults in this country like in the US."

A DoH spokesman has said the smallpox vaccine was being bought "as part of the government's continuing vigilance against international terrorism", although there was no "credible threat".