The last Conservative government opposed state aid to a former company of Lakshmi Mittal, it emerged on Thursday.

Irish Ispat, a subsidiary of the Labour Party donor's company, called for subsidies to enable it to take over Irish Steel in 1995. However, concerned about the effect on British Steel, then-trade minister Tim Eggar lobbied for the European Commission to outlaw any aid to the firm.

"I believe that the subsidy put to Irish Steel worked against British national interests, against the interests of British Steel and threatened British jobs," Eggar told the BBC.

And Mittal was involved in a further row yesterday, this time with the London School of Economics which claimed that donations made by him to a fund for less privileged students stopped after his daughter was not offered a place on a course.

However, the statement was later withdrawn.