Ecclestone: "surprised" by exemption for Formula One
The party was famously forced to hand back a £1m donation from Formula One mogul Bernie Ecclestone in 1997, in a scandal which rocked Tony Blair's fledgling administration.
The cash was linked by Labour's critics to a decision to temporarily exempt Formula One from a tobacco advertising ban.
Now the row has been re-ignited as Formula One bosses attempt to clear the sport's name before the advertising ban finally becomes law later this year.
'No ban sought'
A long-time associate of Mr Ecclestone claims he never asked Tony Blair for special treatment.
Mr Ecclestone was, in fact, "surprised" when he learned of the "absurd" decision to grant Formula One a temporary exemption from a ban so it could seek alternative funding, it is claimed.
The billionaire motor racing tycoon had made his donation to Labour because he was impressed by its decision to spare high-earners massive tax increases.
'Absurdity'
The issue of tobacco advertising had been discussed when Mr Blair met Mr Ecclestone in Downing Street.
But the idea to grant Formula One a stay of execution had actually come from the Department of Health, it is claimed.
Max Mosley, former president of Formula One governing body the FIA - who claims to have first introduced Mr Ecclestone to Tony Blair - has set out the sport's version of events in a letter to Health Secretary Alan Milburn.
"We are not seeking and have never sought any exclusive exemption for Formula One from UK or EU efforts to ban tobacco sponsorship and advertising," he says.
"Unfortunately, the obvious absurdity of an exclusive exemption for Formula One did not occur to your department when it was proposed unilaterally and without consultation with the FIA in November 1997."
'Mad suggestion'
He said asking for special treatment would have "upset the rest of sport" and alienated the seven EU countries without a Grand Prix.
"It was a mad suggestion from the outset," Mr Mosley told BBC Radio 4's The World at One.
"But of course once the exemption had been given, we couldn't really ungive it, we just said we were shocked and horrified when it came out," he added.
Ban still on
A Health Department spokesman said it was "not interested in who said what when."
"Subject to consultation our policy remains that most UK sports and events will have until July 2003 to find alternative sponsorship."
She said "Global sporting events", such as Formula One, will have until October 2006 to comply.
But, she added: "No new sponsorship agreements will be allowed and all tobacco sponsorship, whether of sports or anything else will end by October 2006."
'No impropriety'
The latest twist in the long-running Ecclestone saga will nevertheless be an embarrassment to ministers anxious to draw a line under stories of alleged "cash for influence."
In recent weeks, Labour has been accused of:
Downing Street has denied any impropriety in each case.
It says Mr Blair was simply promoting British industry.
But that has not stopped the Conservatives calling for an inquiry and an official body to be set up to investigate such cases.
The leader of one of Britain's biggest unions has also weighed in, urging Labour's leaders to "get a grip" on the situation.
TGWU general secretary Bill Morris said: "A lot of people are worried that the Labour Party is abandoning its roots in favour of securing a relationship with business."