Blair pushed through deal for Indian billionaire who gave Labour £125,000

TONY BLAIR intervened to help an Indian billionaire buy a giant Romanian steel company a month after the tycoon donated £125,000 to the Labour Party, The Telegraph can reveal.

In an extraordinary letter, Mr Blair told Romania's prime minister that selling his biggest state-owned enterprise to Lakshmi Mittal, one of the world's richest men, would enhance the country's chances of joining the European Union.

Mr Blair later told MPs that Mr Mittal's company was British. In fact, LNM Holdings is based in a Caribbean tax haven. It operates almost entirely overseas and competes against British steelmakers that have shed 6,000 jobs in the past year.

The disclosures are an acute embarrassment to the Prime Minister following a series of allegations that the Government favoured firms that gave to Labour, including the affair of the £1 million Bernie Ecclestone donation, revealed by The Telegraph in 1997.