We made it clear we couldn't accept any further donations... it wasn't a question of deciding to do it because the journalists had inquired

Tony Blair

The issue under the microscope is whether the government sought advice on the controversial gift before reporters began to investigate.

That hinges on whether in his letter to Sir Patrick, Mr Blair mentioned the �1m already received or only queried future sums.

Mr Blair told BBC One's Breakfast With Frost programme: "We decided to ask the standards watchdog whether we should repay the money and what we should do in these circumstances where there was an apparent conflict of interest even though nobody had ever asked us to do anything improper.

"With the published correspondence at the time you can see we mentioned the first donation too. We did ask for guidance on it."

Allegations 'rehashed'

Mr Blair dismissed the allegations as re-hashed "old stuff". And he denied he had only acted to repay the money after being caught out by reporters.

"We made it clear we couldn't accept any further donations and there was discussion over the next few days. It wasn't a question of deciding to do it because the journalists had inquired."

Pressed again that Labour had mentioned only the prospect of a second donation and not the first, Mr Blair insisted: "That's not right. What we asked for was advice. When you look at the correspondence I think you will find it dealt with all the issues.

"We were in a situation where there was an apparent conflict of interest so we asked his advice, he gave it and we took it."

Tories: Blair 'in mire'

The Tories accused Mr Blair of being evasive.

Shadow Cabinet Office minister Andrew Lansley said: "The prime minister pledged to be purer than pure but his answers are getting murkier and murkier.

"The man who described himself as a pretty straight sort of guy is clearly trying to hide something.

Bernie Ecclestone's donation was returned

"Until either Mr Blair gives straight answers to straight questions or the Neill Committee undertakes a full investigation, the prime minister's reputation will sink deeper and deeper into the mire."

Northern Ireland Secretary Peter Mandelson also said he was "not intending to mislead" when he said in November 1997 the prime minister had decided to give back the donation before Labour was contacted by the press.

Mr Ecclestone made his donation in January 1997 - while Labour were still in opposition.

After the party came to power in May of that year, the new government announced a ban on all sports sponsorship by tobacco companies.

But in November it was proposed that Formula One be exempted and reporters started to investigate whether there was any link between the sport and Labour.