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Thursday, 14 February, 2002, 08:47 GMT
Q&A: 'Garbagegate'
What did Mr Blair do?

He wrote a letter of support to what he says was a British company which was trying to take over Romania's state steel industry.

The owner of that company, Indian billionaire Lakshmi Mittal, had recently donated 125,000 to Labour party funds.

So he was doing a Labour donor a favour

Downing Street has said Mr Blair did not know anything about this connection at the time.

Mr Blair says he was approached by the British embassy in Romania to write a letter on behalf of LNM.

The prime minister reportedly "spent less than 30 seconds" on signing the fateful letter.

But opposition parties have sensed a scandal and have written a series of parliamentary questions which they hope will give them further ammunition to attack the government.

But he was helping a British company?

Mr Blair's repeated assertion that he was simply "celebrating the success" of a British company is, on the face of it, not true.

LNM is not a British company in any meaningful sense.

It is registered in the Dutch Antilles and less than 1% of its 100,000 plus workforce is based in the UK.

Worse, for Mr Blair, it is a major global competitor of Britain's own struggling steel industry, Corus, formerly known as British Steel.

Mr Mittal's corporate headquarters are in the UK and he pays income tax here.

He is also frequently cited on newspaper "rich lists" as one of Britain's wealthiest men, even though he is an Indian citizen.

How crucial was the letter?

Downing Street has claimed that the letter was not instrumental in securing the deal for LNM.

But a spokesman for the Embassy has told the BBC that it had been an important factor and said the LNM contract was far from a "done deal".

The British Embassy in Romania had been working with LNM for months on the takeover but both parties were worried about the sudden arrival of a rival bidder, in the form of French steel giant Usinor.

It seems LNM needed extra help to convince the Romanian government that it was a credible contender - hence the request for a letter from Downing Street.

Is anyone else being targeted?

The focus of the row has shifted to a certain extent to the role played by Mr Blair's Downing Street chief of staff Jonathan Powell.

If Mr Blair did not know the boss of LNM steel was a substantial Labour donor then the Tories are pretty sure that Mr Powell will have done.

It has also emerged that the letter had a passage describing Mr Mittal as a friend deleted before the prime minister signed it.

What are the Tories hoping to achieve?

Mr Blair and his team are only too aware of the power of "sleaze allegations" to cripple a government.

They were used to devastating effect by Labour itself, in opposition.

The image of a prime minister pulling a few strings to help his wealthy foreign pals will be a gift to tabloid leader writers.

It is also very much at odds with the image of proberty Mr Blair likes to project.

In the words of Mr Blair himself at Prime Minister's Question Time: "Because the Conservative party got into such difficulties in the previous parliament, because leading members of the Conservative party are in jail or have just come out of jail, what the Conservative party want to do is ... smear us with the same brush."

So is any of the mud sticking?

Mr Blair's irritation with Tory attempts to link the Mittal row to earlier sleaze allegations over failed US energy firm Enron have been reflected in the increasingly colourful language he has used to dismiss it.

First it was "Enron Chapter 55", now it is "Garbagegate".

But, at times, Mr Blair looked rattled during Prime Minister's Question Time.

He pointed out that it was only thanks to Labour that donations such as Mr Mittal's were in the public domain.

Under the Tories large political donations were kept under wraps.

Under Labour they were "a matter of public record", Mr Blair said.

The Tories and Plaid Cymru do not see that as much of a defence - and are continuing to press for more answers.

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