Lord Mandelson defended his integrity yesterday in face of criticism over his links with Russia’s richest man.

As new questions were raised over the Business Secretary’s connections with wealthy businessmen, he dismissed suggestions of a conflict of interest between his former role as European Trade Commissioner and his apparent friendship with Oleg Deripaska.

Speaking on BBC One’s Sunday AM, Lord Mandelson attacked the “muck-raking stories that have appeared in some of the Conservative newspapers in the last week, doing the Conservatives’ job for them”. He said: “I have a very clear view of my public role and the responsibilities I have in that public role and how I spend my private time.

“There has been innuendo that I gave favours or benefits as Trade Commissioner to certain individuals because of my personal friendship with them. The entirety of the European Commission, the director general for trade himself, has made clear that it is 100 per cent false.”

Concern over the extent of the acquaintance hinges on Lord Mandelson’s promotion of a plan to reduce European Union tariffs on imported raw aluminium when he was Commissioner. The tariff was reduced last year from 6 per cent to 3 per cent, and mechanisms are in place to remove the tax completely from next year. Mr Deripaska’s company, Rusal, is the world’s largest aluminium producer. At current prices the reduction will save Rusal about £117 million a year.

Pressed yesterday as to whether there was a perceived conflict of interest or lack of judgment, Lord Mandelson replied testily: “You are doing exactly the same as the Tories and the Tory-supporting newspapers are doing. You are creating a whole lot of smoke, a whole lot of innuendo . . . You’ve said I’ve done nothing wrong, therefore what do I have to answer for?”

Newspaper reports published yesterday claimed that Lord Mandelson has accepted hospitality from two businessmen who benefited from key EU decisions during his term as trade commissioner.

It was claimed that he has been a guest of Nat Rothschild, co-chairman of a hedge fund that had shares in Mittal Steel and Arcelor during a hostile takeover in 2006. It was also alleged yesterday that he was entertained by Diego Della Valle, who runs the exclusive shoe and handbag company Tod’s, not long after a temporary 20 per cent tariff had been implemented on millions of cheap Chinese shoes.

Chris Grayling, the Shadow Work and Pensions Secretary, said: “His flustered reaction on these issues clearly show they are questions he needs to answer.”

Lord Mandelson voiced regret yesterday at the previous breakdown of his relationship with Gordon Brown, acknowledging that it had been a distraction from their work for the Government. The Business Secretary admitted that his decision to back Tony Blair for the Labour leadership in 1994 had caused a rift with Mr Brown.

“I wish it could have been different,” he told the BBC. “I think both of us would say we wasted a lot of the energy and time that we could otherwise have devoted to the success of the Government by not repairing our relationship sooner.

“Now is the chance to do so and leave the past behind us and that’s what I am going to do.” Expressing strong support for Mr Brown, he said he had “absolutely no expectation” that anyone else would lead Labour into the next election.

Lord Mandelson said that voters were now “looking at the Prime Minister afresh . . . and saying he is decisive, he is capable of bold measures, he does know where to lead the country”.

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