Tony Blair is facing renewed demands for answers amid claims that Lakshmi Mittal is set to bid for a major steel contract in the Czech Republic.

Downing Street has said that the prime minister wrote to the Czech government in support of British industry - although the prime minister's spokesman has denied that the letter concerns the LNM group owned by Mittal.

As investigations into Labour's links to Mittal continue, it was confirmed yesterday that the Romanian government did not solicit a letter from the prime minister as a guarantee of Mittal's probity.

As the digging continues, Asian business leaders are warning that the on-going controversy is reinforcing the negative perceptions of Asians and could drive away valuable investment.

The Guardian reports that Mittal has avoided paying personal tax in Britain, due to a loophole in the law that Labour pledged to close before being elected.

A poll of voters in the paper reveals the allegations are making little difference to Blair's appeal - 70 per cent agree that it is "garbagegate", with only a quarter saying it made a difference to them.

The Conservatives have called for a block on any more loans from the European Central Bank to Sidex.