The prime minister, the tobacco baron, the holiday chateau, and the mystery of the missing DTI report

Marie Woolf, Chief Political Correspondent ,Independent on Sunday, 25 May 2003

The Government has been accused of burying a controversial inquiry into allegations that Britain's largest tobacco company "deliberately stimulated" the smuggling market.

MPs and anti-smoking groups have demanded to know whether Tony Blair has personally intervened in the inquiry into British American Tobacco (BAT) because of his links with Alain Dominique Perrin, a friend whose firm is one of BAT's biggest shareholders.

Tony Blair took a five-day holiday in south-west France last year at the 15th-century chateau of the billionaire businessman whose firm owns BAT shares worth around £3bn. M. Perrin, who heads the luxury goods firm Richemont, has stayed at Chequers, the Prime Minister's country residence.

Before heading to Bristol University, Mr Blair's eldest son Euan had a summer job in the smart Sloane Street branch of the gentlemen's oufitters Hackett, one of the shops owned by Richemont. Downing Street insists that Mr Blair's visit to the chateau was "a social thing", a "private holiday" where business was not on the agenda.

Richemont also owns the luxury brands Cartier and Chloé, which helped make Stella McCartney's reputation. It suffered poor trading last year, but has a 21 per cent stake in BAT, upon which it relies heavily for its profits.

The Tories plan to table questions to discover whether Mr Blair has ever discussed BAT with M. Perrin, who retires in October. Chris Grayling MP, a Conservative health spokesman, said he was "very concerned" that the inquiry was taking so long.

The Liberal Democrat health spokesman, Evan Harris, yesterday questioned Mr Blair's judgement in choosing to accept hospitality from a figure with serious links to the tobacco industry.

"The best way for the Government to avoid these questions is for leading figures like the Prime Minister not to associate with people who invest in tobacco. It is an evil trade that kills."

The Government will come under fresh pressure to publish the long-awaited inquiry report when Parliament returns next week. A powerful committee of MPs, whose investigation prompted the inquiry, is frustrated by lack of progress and is threatening to recall BAT executives for further questioning.

The Health Select Committee fears that a Department of Trade and Industry (DTI) inquiry set up in 2000 by Stephen Byers, the former Secretary of State, has been deliberately "kicked into the long grass" by ministers.

"I am concerned about the length of time [the inquiry] is taking and the committee always has the option of revisiting inquiries and records, and this is certainly an issue I would not wish to abandon," said David Hinchliffe, Labour chairman of the committee.

The anti-smoking lobby group Ash said it was concerned that the Government might have been put under pressure by the tobacco industry to shelve the report.

Mr Blair has been involved in controversy involving the tobacco industry before. The Labour Party was forced to give back a £1m donation by Formula One boss Bernie Ecclestone after the Government argued for the motor sport's exemption from a ban on advertising tobacco.

The DTI is probing allegations that BAT may have "profited from bootlegging" and "deliberately stimulated" the smuggling market.

The inquiry was ordered by Mr Byers following a recommendation by the House of Commons Select Committee on Health. It was described by DTI officials as an inquiry with a restricted remit, rather than a full-scale investigation when it was announced.

The DTI refused to comment on the inquiry except to say it was still "ongoing". BAT also refused to comment and said both it and the Government were bound by confidentiality agreements.

BAT has consistently denied any involvement or connection with cigarette smuggling and has condemned the practice.