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More Labour links to Mittal revealed: Report

The Blair Government approved a £2.3 million grant to a company owned by London-based NRI steel magnate Lakshmi Mittal, facing cash-for-favours allegations, in the same month he gave £125,000 donation to the Labour Party, a media report claimed on Friday.

Officials at the Department for International Development approved the subsidy by the World Bank in May 2001 to a company run by Mittal in Kazakhstan, The Independent newspaper reported.

Meanwhile, Clare Short, International Development Secretary, in a parliamentary answer said that Mittal received government support to get two more cheap loans worth £175 million for a major steel modernisation project in Kazakhstan.

The new loans - worth more than double the £70 million aid for a controversial steel project in Romania - fuelled the row raging over the help given to the Indian millionaire from no fewer than four government departments to aid his business activities.

However, a Tory attack on Mittal's connections with Downing Street, the Prime Minister's Office, was blunted Thursday night with the disclosure by Short that the steel magnate had also received government backing for another £50 million cheap loan for a steel complex in Trinidad - supported by the Tory administration in 1996.

Details of the government support for Mittal's companies were released by Short in a parliamentary answer to Caroline Spelman, the opposition's overseas development spokeswoman.

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