The Enron row took a new twist yesterday when the focus shifted to relations between the government and the firm's auditor, Andersen.

Downing Street, which dismissed fresh speculation as "overheated nonsense", was forced to give a detail account of how Whitehall lifted a ban on the awarding of government contracts to Andersen soon after Labour came to power.

The ban on the firm - which has close links to Labour - was imposed by the Tories, who were seeking £200 million in damages from the firm following the De Lorean affair in the 1980s.

On coming to office, Labour agreed a £21 million out of court settlement with the firm and lifted the ban on awarding government contracts.

Since the ban was lifted, Andersen is reported to have won up to £10 billion in capital projects.

Downing Street sources insisted yesterday that the government had acted on legal advice it inherited when it came to office, although the Tories claimed that the "case was nowhere as close to settlement as has been suggested".

A spokesman also repeated denials that the government had given preferential access to Enron bosses.

The pressure was also stepped up on former Tory minister and Enron board member Lord Wakeham yesterday.

The peer was last night preparing to fly to the US to give evidence to two separate Congressional investigations into the collapse of the energy firm.

The Lib Dems have called on him to stand aside as chairman of the Press Complaints Commission until the matter has been resolved.