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Blair in middle of 'cash-for-access' deal involving Lakshmi Mittal

British Prime Minister Tony Blair was caught in a new 'cash-for-access' controversy after it emerged that he had intervened on behalf of Labour Party donor and steel magnate Lakshmi Mittal in the NRI's bid to buy a Romanian government-run steel plant, British media reported on Sunday.

Blair wrote a letter to Romanian Prime Minister Adrian Nastase in July last year that sale of Romanian steel firm Sidex to Mittal's LNM group would 'set Romania even more firmly on the road to membership of the European Union", the Sunday Observer reported.

It said the 300-million pound deal was officially signed two days after this letter was sent.

The prime minister's office confirmed that Blair had indeed written the letter on July 23 to his Romanian counterpart Nastase.

Lakshmi Mittal has donated 125,000 pounds to Blair's Labour Party.

"I am delighted by the news that you are to sign the contract for privatisation of your biggest steel plant Sidex with the LNM group," The Sunday Telegraph quoted Blair's letter as saying.

Although Mittal is still an Indian national, he has lived in London since 1995 and his company is based in Dutch Antilles in the Carribean.

Opposition MPs are now to raise the issue in the British parliament following complaints that LNM is not a British company and that its overseas operations include direct competition with British steel makers, who have seen their industry lose 6,000 jobs in the past year.

An official spokesman for Blair, however, insisted that the LNM Group 'has a British address', which is listed as being at Berkeley Square House, central London.

The spokesman said it was 'perfectly normal' for the prime minister to write on behalf of British-based companies involved in major commercial deals abroad and insisted that the privatisation deal was effectively sealed before the letter was written.

"The prime minister wrote to the Romanian government after the contract had been awarded, on the advice of the foreign and commonwealth office," a spokeswoman in Blair's office said.

However, Nastase was quoted in a press statement from the Romanian foreign ministry as saying that the letter 'eliminates any speculation over the firm stand of LNM'.

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