Drinks, dinners, differing accounts | The witness | Alice Miles: comment | Peter Riddell: briefing | Rachel Sylvester: analysis | Questions for Mandelson | Sketch | Osborne chronology and Rothschild reply | Hellraising for the super-rich

George Osborne was fighting for his reputation last night after it was claimed that he was involved in detailed talks about a donation to the Conservative Party through a company controlled by the Russian oligarch Oleg Deripaska.

Hours after the Shadow Chancellor denied outright that he solicited money from Mr Deripaska, Nathaniel Rothschild, his erstwhile friend, made explosive new allegations and named a witness.

Mr Rothschild asserted that James Goodwin, one of his guests at his Corfu villa, was present when he, Mr Osborne and Andrew Feldman, the Conservative chief executive, discussed a possible donation by Leyland Daf, controlled by Mr Deripaska.

Yachtgate: where Osborne and Rothschild differ

Five key questions remain unresolved over allegations that Conservatives solicited a donation from Russian billionaire

• A witness with impeccable Wall Street credentials

• Drinks, dinners and differing accounts: a weekend on Corfu

• George Osborne on the rack over new donation allegations

BACKGROUND

• Oleg Deripaska - oligarch at centre of storm

• Hellraising for the rich: how Osborne met Rothschild

• Osborne's chronology and Rothschild's reply

Multimedia

• Osborne and the oligarch

Related Links

• LETTER: Nathaniel Rothschild to The Times

• Drinks, dinners and differing accounts

• George: you never break the code of silence

Mr Rothschild said that the discussion continued once the party arrived on the Queen K, Mr Deripaska’s yacht.

Earlier Mr Osborne gave a lengthy account of his relations with Mr Deripaska and said: “We didn’t ask for money. We didn’t receive any.”

Mr Rothschild issued his statement at 9pm in what appeared to be an escalation of hostilities between the hedge fund manager and his old friend from Oxford. In it, he directly contradicted Mr Osborne’s account that there had been no discussion of channelling donations through a British company.

He went on to say that his witness, Mr Goodwin, recalled that the subject of a donation arose briefly after they went to the Russian’s yacht “but the conversation gained no traction”.

Mr Goodwin is a former adviser to President Clinton and a prospective nonexecutive director of Rusal, Mr Deripaska’s aluminium company, Mr Rothschild added that at dinner later that evening the donation was again talked about “and Mr Osborne was interested in whether and how such a donation could be secured”.

Mr Osborne had said in his statement that “there was no discussion about how a donation by Mr Deripaska could be concealed or channelled” Later, a spokesman said that Mr Osborne denied absolutely “any new recollections from Mr Rothschild”.

In another twist, sources close to Mr Deripaska suggested that discussions about a donation had taken place, but firmly denied that he initiated them.

Even before Mr Rothschild’s statement, the affair had provoked huge embarrassment for the Conservative leadership, with Tory MPs raising questions about Mr Osborne’s judgment in allowing himself to become embroiled in questions about funding.

There was also unease that the leadership had questioned Lord Mandelson’s links with the oligarch while apparently being unaware of the extent of Mr Osborne’s and Mr Feldman’s discussions. But David Cameron told reporters last night: “It was the right judgment not to ask for any money, it was the right judgment for the Conservative Party not to take any money and it was the right judgment today to come out and explain very clearly all the conversations that took place.”

A statement issued on behalf of Mr Osborne and Mr Feldman said that there had been a conversation involving them and Mr Rothschild about the possibility of a donation from Mr Deripaska. It said that the suggestion was made by Mr Rothschild and that it was dismissed by the Conservatives as “inappropriate”.

Sources close to Mr Rothschild said that he felt that Mr Osborne had been guilty of bad manners by allegedly encouraging media reports that embarrassed two of his friends, Mr Deripaska and Lord Mandelson.

But Mr Osborne and Mr Feldman suggested that now that they had provided a full and detailed explanation of their dealings with Mr Deripaska, Lord Mandelson should do the same.

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