Lord Mandelson answers his critics in a letter to The Times

Lord Mandelson has admitted that the public were misled about when he first met the oligarch Oleg Deripaska and acknowledged that his new ministerial role requires him to be more careful about his contacts with the wealthy.

His presence on board the aluminium tycoon’s yacht in Corfu this summer has dogged him since his return to the Cabinet. After a week dominated by claims about the Shadow Chancellor, George Osborne, who also accepted Mr Deripaska’s hospitality on the Queen K, the focus has returned to the Business Secretary.

In a letter to The Times today, Lord Mandelson corrects a previous statement from his office which suggested that he had first met the Russian in 2006. “This was not the case: to the best of my recollection we first met in 2004 and I met him several times subsequently,” he writes.

The length and nature of their relationship is central to questions over whether, as European Trade Commissioner, Lord Mandelson faced potential conflicts of interest when dealing with matters relating to Mr Deripaska’s interests. A decision to exempt his business from a tariff on aluminium foil, for example, was signed off by Mr Mandelson in December 2005.

Officials at the European Commission initially suggested that contact had been limited to “a few social gatherings in 2006 and 2007”. The briefing was reported to have been based on information supplied by the outgoing Trade Commissioner.

In his letter today, Lord Mandelson says the statement was issued during the weekend that he was moving from Brussels and just before being admitted to hospital for an emergency operation. He said he “made no personal intervention to support the commercial interests of Mr Deripaska”.

He still failed to clarify whether or not he actually stayed on board Mr Deripaska’s yacht although people who were there say he did because his host, Nathaniel Rothschild, did not have room for him at his villa.

Lord Mandelson defends his close prior engagement with the world’s business elite, saying that it “adds to what I bring to my job now”. But in an acknowledgement of public concern – both his previous resignations came after entanglements with very rich men – he said that he would ask his most senior civil servant to help him to avoid even the appearance of being compromised in the future.

“I met a great number of business people round the world as EC Trade Commissioner,” writes Lord Mandelson, but adds that he would “ensure that no conflict of interest, or perception of such, arises from any of my past or indeed future contacts”.

Lord Mandelson’s letter suggests that he will forgo the high life now that he has returned to British Government. The UK’s ministerial code is more stringent than the rules for EU commissioners, who regularly holiday with their wealthy friends and travel on their private jets without making any declarations. Lord Mandelson is known to have stayed with Mr Rothschild in Corfu and at his home in the Alps and has travelled in the financier’s private plane.

He faces an immediate test. Tomorrow he flies to Moscow for a four-day trade delegation. The trip includes a reception for business leaders in the British Embassy on Monday night.

Mr Deripaska was on an original guest list but recently dropped off, one of those organising the trip told The Times. It is not known whether the oligarch or the Government took the decision for him not to attend.

Yesterday, Gordon Brown defended Lord Mandelson, saying: "The matter was investigated by the European Commission at the time and there was nothing untoward found, and that is where the matter rests."

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