Tony Blair is facing fresh questions over his lobbying in support of British businesses which have financially supported the Labour Party.

The Independent on Sunday reports that during a brief trip to Prague last week, the prime minister lobbied his Czech counterpart, Milos Zeman, over the sale of 24 third-generation multi-role JAS-39 Gripen combat aircraft built by a British-Swedish consortium of BAe Systems and Saab.

BAe systems is reported to have donated more than £5000 to Labour funds in 1998/99 and 2000/01, as well as paying £12 million to sponsor the millennium dome's Mind Zone and sponsoring a ministerial question and answer session at the 1999 Labour Party conference.

However, the company's 2001 annual report states: "It is the company's policy not to make contributions to political parties."

But the newspaper says that while there is no suggestion of impropriety, the case has echoes of the Mittal affair. Then, Blair supported a bid by Indian tycoon Lakshmi Mittal to take over a steel works in Romania.

The Conservatives said the case highlighted the need for an independent review system to examine such cases.

Shadow Cabinet Office minister Tim Collins told the Independent: "Once again, the government in general and the prime minister in particular is found to have undertaken extraordinary efforts on behalf of an organisation which has done favours for the Labour Party."

He said there should be an "independent mechanism by which the public can be satisfied that a full examination of the evidence is carried out to establish no impropriety has occurred".

But Downing Street, which confirmed that the sale was discussed during the visit, denied any allegations of wrongdoing.

A spokesman said the prime minister "makes no apology for promoting Britain and British business".

The Czech government said in a statement that it was perfectly natural for the two heads of government to discuss business ties.

Czech government spokesman Libor Roucek said Blair did not have to lobby for BAe-Systems/Saab since it was the only aircraft manufacturer which met the sales conditions stipulated by the Czech government. The remaining four contestants withdrew from the tender last year.

Number 10 said the key issue for the visit, which took place on Blair's return from talks with US president George Bush in Texas, was European enlargement.

Prague has recently become embroiled in a row with politicians in Germany, Austria and Hungary over the controversial post-war Benes Decrees, which saw 2.5 million ethnic Germans expelled from the then Czechoslovakia and thousands of ethnic Hungarians dispossessed.

The Czech government had been keen for further support of its view that the decrees pose no barrier to enlargement - support which Blair gave.

Also discussed was the crisis in the Middle East, with a Czech anti-chemical unit recently being deployed in Kuwait.

Fighter deal

The Czech air force contract had seemed likely to go to the Anglo-Swedish consortium even before Blair's intervention.

Last December the Czech government announced its intention to begin negotiations with BAe Systems/Saab on the contract - valued at 50 billion Czech crowns or around 1.4 billion US dollars.

When additional costs such as the adaptation of airfields, training of pilots, weaponry and operating costs are added, critics say the final cost could be double the value of the contract price.

But the new planes are needed to replace the country's fleet of ageing MiG 21s, which are to be decommissioned in 2004. Without replacements, the Czech Republic will have no supersonic air cover after that date.

However, the Gripen, which is used by the Swedish and South African air forces, is reported to never have seen combat experience, and the size of the contract has prompted criticism that the country cannot afford the purchase.

But last month Czech defence minister Jaroslav Tvrdik and senior army officials visited Sweden to negotiate the contract.

And to address concerns over expense, the Anglo-Swedish consortium has offered the Czech government offset programs to 150 percent of the value of the contract.