A Commons committee has urged the Foreign Office to give clearer guidance to British embassies on contract endorsements.

An cross-party group of MPs claims today that British ambassadors abroad should be issued with guidelines on how to deal with ministerial requests for letters supporting bids by British companies.

The report, by the foreign affairs select committee, follows the "'Mittalgate" affair, in which the prime minister signed a letter to the Romanian government supporting a bid for a steelworks by Lakshmi Mittal, a Labour donor.

At the time, Conservative leader Iain Duncan Smith claimed that the government had created "huge doubts about their probity".

MPs stressed that Tony Blair's intervention was a "perfectly proper and necessary part of any government's determination to try to strengthen the hand of British exporters round the world".

However, they expressed concern at "the specific situation in which a diplomat may be at risk of appearing politically partial".

"We recommend that the FCO issue detailed guidance to its diplomats as soon as possible on how they should respond to requests from ministers that they draft letters of support for companies seeking contracts abroad, when those companies are declared donors to a British political party," the committee's report said.

The then ambassador to Romania, Richard Ralph, was in an "invidious position" the MPs said.