The government continued to defend itself against sleaze allegations over the weekend, after Martin Sixsmith denied claims that he had resigned from his post as communications chief at the department of transport.

"I wasn't sacked, I didn't resign, I haven't offered my resignation. Stephen Byers wanted me to resign because he said he would only accept Jo Moore's resignation if I resigned at the same time," said Sixsmith, who claimed that the permanent secretary at the department, Sir Richard Mottram, had assured him he would not be forced out of his job.

The resignation, along with that of spin doctor Jo Moore, was announced on February 15 following reports that Moore had sought to publish damaging rail statistics on the same day as the funeral of Princess Margaret.

However, transport secretary Byers denies these claims. "Martin Sixsmith agreed with Sir Richard Mottram, the permanent secretary, that he, Martin Sixsmith, would resign from his post as director of communications on February 15. That's the situation which is agreed and stated by Sir Richard Mottram. Those are the facts," he said.

Downing Street is supporting this version of events, with reports suggesting that Mottram is next to leave the department as blame for the mix-up is levelled at him. Byers himself, however, is hotly tipped to be a victim of the next cabinet reshuffle.

The Steelgate row continued over the weekend when the former permanent secretary Sir Richard Packer questioned the reported events leading up to Tony Blair's letter to the Romanian government supporting Lakshmi Mittal's bid for the country's steel industry.

In his article, he dismissed the government's defence that responsibility for the letter lay with the British ambassador in Bucharest, saying that in reality, officials backed individuals favoured by ministers.

Plaid Cymru MP Adam Price has called for an independent inquiry into the affair.