Blair: intervention

Downing Street has been forced onto the defensive over alleged links between government policy and donations to the Labour Party.

The move came after it emerged that Tony Blair used a recent visit to Prague to lobby 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. The firm also sponsored a ministerial question and answer session at the 1999 Labour Party conference.

Downing Street said it would be odd if the prime minister did not "bat for British business" when travelling abroad.

"The world would be turned on its head if the prime minister were not to go in to bat for one of the largest British manufacturers for a contract here that would be worth a quarter of a billion pounds for the company," said a spokesman.

But the spokesman was forced to explain why Number 10 had made no reference to the lobbying effort when quizzed about the reason for Blair's visit.

"We have absolutely nothing to apologise for, the prime minister believes it was absolutely the right thing to do and he believes it would be a dereliction of his job as prime minister were he not to do it," he said.

Number 10 said going public on the exercise could have limited the effectiveness of Blair's intervention.

"A judgement was taken that it is likely to be more beneficial if the lobbying is done privately rather than publicly," said a spokesman.

The government was also under fire on Monday over claims that it suspended normal rules when it awarded a multi-million contract for small-pox vaccines to a firm which had donated money to Labour.

The Department of Health bought the vaccines, to be used in the event of a bio-terror attack, without inviting bids in the usual manner.

Blair's spokesman defended the government's decision to suspend the normal tendering process as a result of fears about "national security".

He added that ministers had put the matter before the department's permanent secretary prior to giving the green light to the deal.

The opposition, however, called for greater transparency surrounding Blair's interventions on behalf of big business.

The shadow Cabinet Office minister Tim Collins said: "We have now seen more instances of the way in which the prime minister has an unhealthy fascination with big business and with his own personal cronies.

"The fact is that Mr Blair's government combines buckets of arrogance with very little accountability."