Revenge of Lord Mandelson? Osborne forced to admit FIVE meetings with oligarch in donation row (and just look who's smiling)

George Osborne is struggling to contain a political firestorm over illegal donations as he paid the price of crossing Peter Mandelson. 

The Shadow Chancellor was forced to admit discussing a potential £50,000 gift to the Tory Party from Russia’s richest man, and that he met him five times in total. 

Mr Osborne was left fighting for his reputation after what allies claimed was a dirty tricks campaign orchestrated by Lord Mandelson.



Labour’s new Business Secretary had blamed him for leaking embarrassing details of private remarks about Gordon Brown during a holiday in Corfu this summer, when both visited aluminium billionaire Oleg Deripaska’s yacht.

Yesterday the row took an extraordinary twist as one of the Shadow Chancellor’s oldest friends, Nat Rothschild, stabbed him in the back.

He claimed in a letter to the Times that while on board the yacht Mr Osborne attempted to ‘solicit’ money for the Conservatives from Mr Deripaska.

Mr Rothschild, a friend of Mr Osborne and Lord Mandelson, was hosting guests at his family villa in Corfu and apparently invited both men on to Mr Deripaska’s yacht.

Mr Osborne held a press conference yesterday lunchtime at which he categorically denied the claim that he and chief Tory fundraiser Andrew Feldman had sought cash from the aluminium tycoon.

He insisted: ‘We didn’t ask for money; we didn’t receive any.’

But Mr Rothschild was telling friends he would not ‘back down’ over the allegations and was even prepared to defend them in court.

Sources close to him say they have a ‘silent witness’ - a wealthy American named Jim Goodwin - who was present in Corfu and will back up Mr Rothschild’s claims.



And last night the war of words escalated dangerously as Mr Rothschild issued a statement challenging Mr Osborne's version of events.

Though he did not deny initiating talks about the prospect of a donation by Leyland DAF, a UK firm controlled by the Russian, he insisted Mr Osborne was wrong to claim there had been no discussion of such a gift on the yacht.

He said another of his guests, Mr Goodwin, had witnessed the conversation and 'recalls that the subject of a donation by Mr Deripaska's UK company also arose briefly while we were on the boat, but the conversation gained no traction'.

He said at dinner at his house later that evening, the subject again came up in conversation, and Mr Osborne 'was interested in whether and how such a donation could be secured'.

Mr Rothschild said that a phone call between him and Mr Feldman in mid-September, when the possibility of a donation was again discussed, left him 'with the impression that the Conservative Party remained interested in pursuing it'.

The row over the Shadow Chancellor conveniently overshadowed fresh claims that Lord Mandelson, who signed off changes which benefited Mr Deripaska’s firm while EU trade commissioner, had known the Russian for far longer than he implied.

David Cameron made clear that his closest ally’s job is secure, insisting he had shown good judgment by turning down any donation and disclosing full details of his meetings with Mr Deripaska.

Last night the Shadow Chancellor issued an extraordinary statement admitting that he met Mr Deripaska five times. Four meetings took place over one August weekend.

He insisted he had not solicited or received any donation, or ever discussed directly with Mr Deripaska the possibility of him giving money.

He was forced to concede that he had been involved in a conversation with Mr Rothschild over the possibility that the Russian oligarch could make a donation. continues here

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