Lord Mandelson faced fresh questions last night over his friendship with businessmen close to Colonel Gaddafi's son - who escorted the Lockerbie bomber home.
Opposition MPs demanded explanations after it emerged that Oleg Deripaska and Nat Rothschild mix in the same circles as Saif Gaddafi.
The Business Secretary himself has twice met Mr Gaddafi, the Libyan leader's son in the past four months.
Last month, they met ' fleetingly' at the Rothschild family's £30million estate on Corfu, just a week before it emerged that Abdelbaset Ali Mohmed Al Megrahi could be released from jail in Scotland because he is dying of prostate cancer.
Lord Mandelson also met the man tipped to be the next leader of Libya at an official engagement in London in May.
Mr Gaddafi has claimed that Megrahi's freedom was linked to trade deals with the UK.
It emerged yesterday that Mr Gaddafi hosted a lavish party for his 37th birthday where the guests included Mr Deripaska, a Russian oligarch who made his fortune from aluminium, and financier Mr Rothschild.
Read more: http://www.dailymail.co.uk/news/article-1208530/Libya-After-Lockerbie-bombers-release-heats-Mandy-hes-forced-deny-deal-Gaddafi.html#ixzz0P8e9nNXP
It took place at the luxurious Splendid Hotel in the coastal resort of Becici in Montenegro.
Mr Deripaska and Mr Rothschild have invested in the £500million-plus Porto Montenegro scheme intended to make the country a 'premier marina destination'.
Mr Gaddafi is also a key figure in Montenegro, where he is eager to strike deals, including shipping agreements, for Libya.
Last year Mr Rothschild hosted a party in honour of Mr Gaddafi in New York.
Lord Mandelson has also been involved with the former Yugoslav republic, championing its entry into the World Trade Organisation.
And he pushed for closer ties between the European Union and Libya when he was trade commissioner in Brussels.
Speaking after talks were announced in February 2008, he said: 'An ambitious free trade agreement would intensify cooperation between the EU and Libya on trade and economic issues and would further strengthen and deepen our relationship.
'Together with our support for Libya's bid to join the World Trade Organisation, these negotiations represent a vital first push forward in Libya's reintegration into the world trading system.'
Lord Mandelson has insisted that claims the UK did a deal with Libya over Megrahi were 'wrong, completely implausible' and 'offensive'. But former Prime Minister Tony Blair admitted the issue had been raised repeatedly during talks.
It also emerged that Lord Browne of Madingley, who is close to both Mr Blair and Lord Mandelson, held talks with Colonel Gaddafi when he was head of BP and keen to secure exploration rights in the oil-rich north African nation.
This came to fruition in 2007 when BP signed a £540million deal - although experts say it was held up by Libya over Megrahi.
In a court case in 2007, Lord Browne's former lover Jeff Chevalier claimed that the BP boss had been accompanied by 'a secret service agent or former secret service agent' when he visited Colonel Gaddafi.
Lord Browne denies this, but it raises the possibility he may have been acting in an unofficial capacity for the Government. Lord Browne could not be contacted last night.
Tory MP Douglas Carswell said of Lord Mandelson: ' People will rightly ask what decisions he has made as Business Secretary and whether he has once again allowed his private life to mix with controversial political decisions.'
Liberal Democrat MP Norman Baker said: 'Peter Mandelson must come clean on whether he or his web of acquaintances had any involvement in this sensitive matter.'
Lord Mandelson said: 'It's not only completely wrong to make such a suggestion, it's also quite offensive.' He said the decision had been 'entirely' an issue for Scottish Justice Secretary Kenny MacAskill.
The Business Secretary added: 'The issue of the prisoner's release is quite separate from the general matter of our relations, and indeed the prisoner's release has not been influenced in any way by the British Government. So the business relations will take their course regardless of what happens to this individual.'
Explore more:
- People:
- Nat Rothschild,
- Jeff Chevalier,
- Oleg Deripaska,
- Peter Mandelson,
- Tony Blair
- Places:
- New York,
- Brussels,
- London,
- Libya,
- Scotland,
- United Kingdom,
- Montenegro
- Organisations:
- British Government,
- World Trade Organisation
Read more: http://www.dailymail.co.uk/news/article-1208530/Libya-After-Lockerbie-bombers-release-heats-Mandy-hes-forced-deny-deal-Gaddafi.html#ixzz0P8e1wULu
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