Ministers defend Mittal deal

Mr Mittal's company was investigated, said Straw

UK Foreign Secretary Jack Straw has insisted that he has no concerns about the government's handling of the Mittal affair.

He said on Friday that Richard Ralph, UK ambassador to Romania, had acted correctly in his work on the deal and had simply been doing what he was told.

I think it is also our duty to be absolutely ruthless in saying that there can never be a relationship between a donor and a government decision

Charles Clarke
Labour chairman

Mr Ralph had argued that the buyout of Romania's nationalised steel company Sidex by Indian tycoon Lakshmi Mittal was in the interests of Britain and western Europe generally.

Mr Straw said Labour donor Mr Mittal's LNM company had been checked out before the deal had been secured.

Speaking for the first time about the affair on BBC News 24's One to One programme, Mr Straw said: "I have every confidence in the way in which Richard Ralph has behaved.

"He was doing what we tell him to do which is to stand up for Britain, to bat for Britain and it's all right people now saying, 'oh well it wasn't a proper British company' - Mr Ralph had the company checked out and yes, it was registered here, we're not daft."

'British' controversy

Opposition parties have pressed the Prime Minister Tony Blair to explain why he backed the Romanian deal when Mr Mittal's company LNM did not appear to be British.

LNM has a London headquarters but its operating arms are both registered overseas and only about 100 staff are UK-based.

Mr Mittal donated £125,000 to Labour during last year's election campaign, but Downing Street insists Mr Blair wrote to his Romanian counterpart, Adrian Nastase, supporting the deal on the advice of Mr Ralph.

Mr Clarke says no mistakes were made.

Charles Clarke, Labour's chairman, has also weighed into the row, arguing that the government had not made a mistake over the affair, but had made a rod for its own back by making party donations more transparent.

"We have a duty as a party to double check, treble check, that any donation is both within the law and that the individual is a law-abiding citizen," he said.

"I think it is also our duty to be absolutely ruthless in saying that there can never be a relationship between a donor and a government decision."

Donor transparency

Mr Clarke stressed that none of the investigations into the Mittal matter had been able to "demonstrate any suggestion really that that has not been followed in this case".

But he told BBC Radio 4's The World at One: "The Labour Party, the government, has created a stick for its own back because we decided it was very important to be transparent about all donations, so we have insisted - in the teeth of opposition from the Conservatives - that all donations should be in the public arena and that is what they are."

The defensive comments follow Mr Mittal's insistence that he has nothing to hide about his takeover of Sidex and that he has "a very British identity".

Mr Mittal's company has also been accused of failing to hand over promised money to a university after his daughter was refused a student place - claims dismissed as "malicious gossip" by a spokesman for the tycoon.