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Tony Blair personally ordered an exemption for motor racing from a tobacco sponsorship ban after Labour received a secret £1m donation from Bernie Ecclestone, the Formula One boss.

New documents released under the Freedom of Information Act show he demanded a change of policy within hours of a meeting with Ecclestone on October 16, 1997, and his aides went on to blur the truth.

The affair was the first sleaze scandal of the new Labour era. At its height, Blair feared the episode would end his premiership and went on television to defend his reputation, saying he was a “pretty straight kind of guy”.

The new documents expose the extent to which he was the driving force behind plans to exempt F1 from Labour’s manifesto pledge to end tobacco sponsorship of sport, pushing a reluctant Department of Health into agreeing. Before Ecclestone’s £1m donation, Labour had planned a universal ban.

Tessa Jowell, a health minister at the time, emerges as having had serious reservations about the move. But a Whitehall memo written on October 31, 1997, states: “The prime minister has made clear his wish to see a permanent exclusion for Formula One from the scope of the tobacco advertising ban.”

The documents show how mandarins warned Blair that he could be misleading MPs over the sequence of events.

At the height of the scandal, the Tory MP John Maples put down a written parliamentary question asking when Blair told Frank Dobson, the health secretary, of his plans to exempt F1.

A briefing note to the Cabinet Office outlining possible responses to the question reveals that the date was October 16. It also reveals Blair ordered Jonathan Powell, his senior aide, to ring Jowell to discuss the issue that evening, shortly after meeting Ecclestone.

However, the note suggests Blair wanted to name October 29 as the date, to be consistent with his previous public claims that the decision was not taken until two to three weeks after the crucial meeting with Ecclestone.

Civil servants warned: “The draft reply is strictly true in terms of the final decision . . . but critics could argue that the answer was disingenuous in that the prime minister’s views had been clearly conveyed by the telephone call on October 16.”

The papers also suggest No 10 set out to mislead the public, via the media, about the prime minister’s role in the affair. A briefing note for Alastair Campbell, then Blair’s press secretary, offers guidance “to dispel the notion that the F1 approach was dictated by the PM alone, after meeting Ecclestone”.

Blair defended the plan for a dispensation on the grounds that the ban could lead to big job losses in Britain’s motor racing industry. However, it has emerged that the then Department for Trade and Industry (DTI) cast doubt on this claim. A memo from the DTI to the health department, sent in November 1997 when the government was still trying to decide how to implement the ban, says: “We believe it is unlikely that if F1 should leave the UK there would be an immediate effect on the industry as a whole.”

The episode took place before political donations had to be publicly declared. For days, Labour refused to reveal whether Ecclestone had given money to the party. As the controversy raged about whether government policy had been influenced by a donation, Gordon Brown, who knew of the gift, found himself denying all knowledge in a radio interview. He was later reported to have returned to the Treasury in anguish, claiming his credibility would be “in shreds” if anyone discovered he had lied.

Tracking the donation

January 1997: Ecclestone donates £1m to Labour

May: ban on sports sponsorship by tobacco companies announced

October: Blair has private meeting with Ecclestone

November 5: government announces proposals to exempt F1 from tobacco sponsorship ban

November 7: government asks advice on donation from standards watchdog

November 11: Labour returns donation

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