The former trade secretary - one of the architects of New Labour and a close friend of Prime Minister Tony Blair - used the loan and a £150,000 mortgage from the Britannia Building Society to buy a house in London's fashionable Notting Hill.

The BBC's Robin Oakley: "A wound-licking time for the government"

Conservatives are demanding a full statement on whether Mr Mandelson failed to give complete information on his Britannia mortgage application.

Mr Mandelson could have been legally obliged to mention the loan from Mr Robinson when applying for the mortgage.

Speaking shortly after resigning, Mr Mandelson said he failed to recall what he had said on the form, but had never intended to mislead anyone.

Michael Howard: "We really need to hear about Mr Blair's attitude to all this"

A statement from the Department of Trade and Industry said: "Mr Mandelson cannot locate a copy of the original application form but believes it may not reflect the final financing arrangements on the property as these were undecided at the time he applied for the mortgage.

"In order to clarify any ambiguity he will be writing to Britannia setting out clearly his arrangements for financing the purchase to the satisfaction of the building society."

Points to clarify

The BBC's John Pienaar: "The pursuit of Peter Mandelson won't stop"

Mr Robinson - who had been under pressure from the opposition over separate allegations surrounding his business dealings, which are being investigated by the Department of Trade and Industry - handed in his resignation hours after Mr Mandelson.

Geoffrey Robinson: Business affairs under investigation

Deputy Prime Minister John Prescott acknowledged there were still issues to be cleared up by Mr Mandelson.

He told BBC Radio 4's Today programme: "There seems to be still a certain amount of confusion - whether he did or didn't or whether he knew or knew not.

"That basically will be cleared up by Peter, I am sure, in the next day or two."

Legal Affairs correspondent Joshua Rozenberg: "It would be a very serious matter"

He went on to say the affair had not damaged the integrity of the government.

Health Secretary Frank Dobson said Mr Mandelson's mortgage was a matter for him and not the government.

He told BBC Radio 4's The World At One: "He has done nothing wrong to the best of my knowledge and he has certainly done nothing wrong as secretary of state for trade and industy and as far as I know nobody has accused him of that."

Mr Mandelson's former researcher Derek Draper: "Labour's standards are too high"

But Conservative Foreign Secretary Michael Howard told the programme one telephone call to the building society would allow Mr Mandelson to clear up the mystery.

He said: "We clearly need to known the position relating to the mortgage application."

Tory deputy leader Peter Lilley has called for the Cabinet Secretary Sir Richard Wilson to investigate the financial affairs of every minister in the wake of the loan revelations.

The twin resignations brought the biggest upset to the Labour government since it won power in 1997.

Tories exert pressure

The opposition is keeping the pressure up and is keen to highlight alleged feuding between those loyal to Mr Mandelson and Mr Blair and supporters of Chancellor Gordon Brown.

Questions asked about Mr Mandelson's mortgage on his home in Notting Hill

Mr Brown's press secretary Charlie Whelan has been accused of leaking the story to the media, although he denies this.

Latest reports are saying sources close to the former minister are urging him to run for Mayor of London, against other candidates such as Transport Minister Glenda Jackson and old Labour arch-rival Ken Livingston.

Mr Mandelson's successor Secretary Stephen Byers took up his new position at the DTI on Thursday. His job is taken by Health Minister Alan Milburn.

Culture Secretary Chris Smith takes over responsibility for the Millennium Dome, while John Denham moves from the social security to health.