Mr Blair denies collusion with casino bosses

Tory leader Michael Howard told MPs at prime minister's questions he had an e-mail which proved officials had discussed the issue with casino firms.

Mr Howard said the culture secretary had denied this in the Commons.

Mr Blair said he did not accept there had been concessions on money laundering offered by the government.

'Cover-up'

And it was "utterly absurd" to suggest there had been "corrupt conversations" with foreign casino owners.

He accused the Tories of "lame opportunism" in opposing gambling reforms they had previously supported.

Mr Howard said he had an e-mail from a "senior official" in the Department of Culture to operators of the biggest casino in Las Vegas.

According to Mr Howard, the e-mail said: "For our work on money-laundering directive number three - still interested in seeing estimates as to what the transactional limit would be. Also interested in other material you feel we should see about this."

Mr Howard said this proved discussions had taken place on the issue.

"What we know is that the government has been offering concessions on money laundering to the operators of those casinos and the government tried to cover it up," he told MPs.

Backbench rebellion

Mr Blair said he had not seen the e-mail but added: "I do not accept that he has somehow shown that there have been concessions offered on money laundering to casino owners.

"It really is ridiculous for him to suggest such a thing."

The gambling bill would tighten gambling laws but allow operators to build super-casinos, with unlimited prize slot machines.

In a concession to critics who claim it will lead to an explosion in problem gambling, Culture Secretary Tessa Jowell has said local people will be consulted before planning permission is granted.

She also pledged action to prevent casinos getting planning permission "through the back door" by closing a loophole in planning rules.

A backbench rebellion on Tuesday against the second reading of the bill failed but the government had a much reduced majority.