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.

Such actions were supported by the then-Labour opposition and steel industry unions, the Conservatives allege.

Claims that Irish Ispat was a British company and should therefore be supported were rejected by the government of the time.

The company went into liquidation last year, owing £400,000 to Customs and Excise, who discovered that Irish Ispat was on a list of creditors three weeks before a letter was sent by prime minister Tony Blair to the Romanian government in support of Mittal's bid for the Sidex steel company.

The Department of Trade and Industry also confirmed that they were not consulted by Downing Street or the Foreign Office before the letter was sent.

The Conservatives are also calling for details of a meeting between the Romanian government and Downing Street foreign policy advisor Sir Stephen Wall in April last year.

Shadow Cabinet Office minister Tim Collins said that these were "significant developments."

"Firstly, he must publish all the papers relating to Sir Steven Wall's conversations with the Romanian government in April last year - significantly only a month before Mr Mittal's £125,000 donation," he said.

"Secondly, he must now state all the instances when any part of the government have intervened in any other country or with any international institution on behalf of Mr Mittal. Thirdly, he can no longer credibly resist the case for a full independent inquiry into the government's handling of this matter and why such an extraordinarily high level of service was provided to the foreign owner of a foreign company."

A spokesman for the Labour Party said that the issue was "a matter for the previous administration".