Mandelson in fresh loan row

Robinson: Accused of using the saga to sell his book

Peter Mandelson has been accused of lying over the notorious £373,000 home loan given to him by former paymaster general Geoffrey Robinson.

The Northern Ireland secretary has always maintained he did not ask for the loan from his multi-millionaire Labour colleague.

But in extracts from his memoirs, published in the Daily Mail, Mr Robinson denies proffering the cash and insists it was Mr Mandelson who first raised the subject of buying a place in Notting Hill.

Mr Robinson is only saying what most MPs and members of the Cabinet already believe

Charlie Whelan

Shadow Treasury minister David Heathcoat-Amory has called for the affair to be reinvestigated by the Commons watchdog committee, which first examined the loan when it came to light two years ago.

At that time Mr Mandelson was condemned for misleading his building society by not declaring it on his mortgage application. He resigned from the Cabinet in December 1998 as a result - only to return to the front bench 10 months later.

Mr Robinson was also forced to quit his office and remains on the back benches.

In his memoirs the former paymaster general also attacks Mr Mandelson as a "divisive and destabilising figure" who should be evicted from the Prime Minister's inner circle.

Unconventional minister

Education Secretary David Blunkett condemned Mr Robinson for self indulgent sniping and challenged him to donate the proceeds of the serialisation to the Labour Party or a charity.

Mandelson: 'Divisive and destabilising'

During an interview on BBC1's Breakfast with Frost programme Mr Blunkett attacked wealthy government insiders who put personal grudges ahead of the needs of Labour voters.

"Newspapers are not in the business of paying large sums of money for books that simply complement the Government's good work," he said later.

"I wonder if as a gesture of good faith Geoffrey Robinson would reveal how much he is making from the serialisation and donate the sum either to the Labour Party or to a charity of his choice."

Fresh inquiry call

Mr Mandelson is believed to consider the loan matter closed and the latest furore an attempt by Mr Robinson to publicise his book.

But Tory minister Mr Heathcoat-Amory is writing to the chair of the Commons Standards and Privileges Committee asking him to reopen the case.

"It now seems that Peter Mandelson did not tell the whole truth in evidence," he said.

"If this is true he has to resign, but it can only be judged by that committee."

Former personal advisor to the chancellor, Charlie Whelan, said Mr Robinson was only saying what most MPs and members of the Cabinet already believe.

"That Peter Mandelson has a destabilising effect on the government and it would be better off without him," he said.

The publication of Mr Robinson's memoirs follows reports of serious rifts at the heart of government made in political reporter Andrew Rawnsley's book Servants of the People.