Lottery lawyers worked for Virgin

Sir Richard: No contact with Freshfields for years

The company giving legal advice to the National Lottery Commission on the bidding process for the Lottery has previously worked for Sir Richard Branson's Virgin group, it has emerged.

Sir Richard is heading a consortium bidding for the licence to run the Lottery for the next seven years.

Current operator Camelot has expressed concern that there could be a conflict of interest and has demanded an explanation from legal firm Freshfields Bruckhaus Deringer.

I don't think our confidence in the process could be reduced much more

Camelot spokesman

Freshfields insists it has fully informed the commission of all previous links between itself, Sir Richard and Virgin.

A spokesman for Sir Richard said the firm, appointed earlier this month, had not represented him or Virgin "for years".

But a spokesman for Camelot said it wanted the process to be fair.

"We have yet to be convinced that the process can be fair," he said.

"This is yet another question mark. I don't think our confidence in the process could be reduced much more."

But Sir Richard's spokesman accused Camelot of "scraping the barrel".

'Mischief-making'

"Perhaps the real issue should come to the fore - Richard Branson's Lottery bid through the People's Lottery consortium is a better bid then theirs and making spurious links between a law firm and Virgin is scraping the barrel," he said.

The row surrounding the law firm's appointment is just the latest in a long list of problems to plague the bidding process.

On Saturday it was revealed that a minister who made public comments about the process was once a paid adviser to Sir Richard.

Arts minister Alan Howarth was paid more than £10,000 a year by Sir Richard between 1992 and 1996.

He acted as a parliamentary adviser to his Virgin empire but said any suggestions of behaving improperly would be "mischief-making".

Last month Mr Howarth publicly defended the National Lottery Commission following a critical High Court ruling.

'Vilification'

The commission was accused of being "conspicuously unfair" for rejecting a bid for the licence from Camelot.

Despite criticism of the commissioners' decision to deal only with the People's Lottery - which was given an extra month to improve its bid - Mr Howarth praised their "very great ability" in interviews.

Commission chairman Dame Helena Shovelton resigned in the wake of the court ruling, blaming media "vilification".

The Department of Culture, Media and Sport has confirmed Mr Howarth was previously paid by Sir Richard, but said he had declared all financial interests.

He had also played no part in decisions on the allocation of the Lottery licence.

Alan Howarth: Accusations of improper conduct are "mischief-making"

As minister for the arts Mr Howarth, who defected to Labour from the Conservatives in 1995, is not normally involved in National Lottery issues.

He told the Daily Mail newspaper he had given interviews about the commission only because other culture department ministers were unavailable.

He said he had reminded civil servants of his previous interest before speaking.

But shadow culture secretary Peter Ainsworth demanded a full parliamentary statement from Mr Howarth on the issue.

The row broke the day after the new National Lottery Commission head, Harriet Spicer, pledged commissioners would be wiping the slate clean as they decide between both bids.

It has also been reported Ms Spicer had links with Sir Richard, but she played them down.