Mr Desmond chose to give the Conservative Party money... at a time when the Conservative Party was about as popular as bubonic plague

Tim Collins

Mr Collins told BBC Radio 4's Today programme that the Tories wanted to know whether the prime minister was present when Mr Desmond made his "apparent offer of free advertising space" in the paper.

"Was the prime minister aware of the �100,000 donation to the Labour Party and when was he aware of it?" said Mr Collins.

The Tories have also asked if there was any contact between Downing Street and the Department of Trade and Industry which gave the go-ahead for Mr Desmond to buy the Express.

'Exceptional circumstances'

Mr Collins said that Stephen Byers who was Trade Secretary at the time had been "less than wholly truthful" when he said that he simply accepted the decision of the Director General of Fair trading not to refer the takeover to the Competition Commission.

Mr Byers had told the BBC's Breakfast with Frost programme that he was acting in line with a previously announced policy on such cases when he decided not to refer Mr Desmond's bid to buy the Express group to the Competition Commission.

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He said that in 2000 he had made clear that in future he would accept the advice of the director general of fair trading on whether to refer merger cases to the Competition Commission.

And the director general had said Mr Desmond's bid should not be referred to the commission.

But Mr Collins insisted: "He [Mr Byers] didn't read out the part that said 'save in exceptional circumstances' which went on to explain that he would intervene when issues of national security or whether unusual circumstances prevail.

"Now the takeover of a national newspaper group is by any definition unusual."

'Popular as plague'

Mr Collins argued that two Labour House of Commons select committee chairman had called on Mr Byers to intervene.

"The fact that he chose not to, and the fact that later he didn't actually tell the truth about whether he had discretion to intervene or not is bound to give rise to public suspicion," he said.

I think many people will find it distasteful that a political party is accepting a very significant donation from a publisher of pornographic magazines

Bishop of Oxford

Mr Collins admitted that his own party had accepted cash from Mr Desmond, which in itself raised questions about his political allegiances.

"Mr Desmond chose to give the Conservative Party money, much less money - infact about �5,000 - in 1997, at a time when the Conservative Party was about as popular as bubonic plague.

"He must have been a pretty strong Conservative to give us money in that year, therefore the question is how come by 2001 he wanted to give �100,000 to the Labour Party.

"That is actually why a lot of people are asking a lot of questions, as to why he gave that money, why the Labour Party chose to keep it secret and whether there was any link to Stephen Byers' decision not to intervene in the take over," added Mr Collins.

'Funny taste'

Meanwhile, the Bishop of Oxford, the Right Reverend Richard Harries said the impression that the government was "surrounded by celebrities, wealthy business and editors of newspapers" was a "worrying perspective".

He told Today: "I think many people will find it distasteful that a political party is accepting a very significant donation from a publisher of pornographic magazines.

"It is all perfectly legal, but it just does leave a funny kind of taste, I think."

On Monday, Downing Street accused journalists of a systematic attempt to undermine the political process over the reporting of the latest donations row.

The comments by Tony Blair's official spokesman come against the background of growing disquiet within the Labour Party over the decision to accept Mr Desmond's donation.