JOHN PRESCOTT was in apparent breach of the ministerial code when he accepted hospitality from the owner of the Millennium Dome, the head of the sleaze watchdog said yesterday.

Downing Street has repeatedly refused to say whether the Deputy Prime Minister’s two-night stay with Philip Anschutz broke the rules. Tony Blair recently dodged questions on the subject in a recent interview and blocked Sir John Bourn, his ministerial adviser, from investigating the trip.

Today a report on the affair by Sir Philip Mawer, the Parliamentary Commissioner for Standards, will be released. Mr Prescott’s friends have said that the minister will be rebuked for failing to register the stay on the ranch or the gifts given to him by Mr Anschutz.

But Sir Alistair Graham, the chairman of the independent Committee for Standards in Public Life, said that it did appear that Mr Prescott had broken the rules. He said that Sir Philip’s report would be no substitute for an independent inquiry because the commissioner’s remit allowed him to judge only against parliamentary rules, not the ministerial code.

“He hasn’t looked at the central allegation, that there was a possible conflict of interest in accepting hospitality from Mr Anschutz, in which, and this is clearly in breach of the ministerial code, you’re not supposed in accepting hospitality to put yourself under an obligation,” he said. “In my view, the Prime Minister, as soon as the allegation was raised, should have asked Sir John Bourn to carry out an independent investigation as to whether he had breached the ministerial code in terms of the provisions relating to conflicts of interest.”

Mr Prescott’s stay at the ranch in July last year may conflict with section 5.2 of the ministerial code, which says: “No minister or public servant should accept gifts, hospitality or services from anyone which would, or might appear to, place him or her under an obligation.”

Sir Alistair criticised Mr Blair for blocking an inquiry by Sir John, who is also the Auditor- General. Such an inquiry would have been Sir John’s first important investigation since his appointment this year.

“Well, I think in not taking that decision it damages not only John Prescott’s position but also it damages the Government as a whole . . . I don’t know exactly whether there was a conflict of interest,” Sir Alistair said.

“All I know is that there was sufficiently serious allegations for an independent investigation to be carried out, and I’m particularly anxious when such investigations are carried out those reports are published.”

Hugo Swire, the Shadow Culture Minister, said: “The only two people who now think that John Prescott hasn’t broken the ministerial code is Mr Prescott himself and Tony Blair. Unless we have an urgent inquiry into Mr Prescott’s actions the ministerial code is simply not worth the paper that it’s written on.”

There was further pressure on the Government yesterday after it emerged that the former secretary of Mr Blair’s chief fundraiser, Lord Levy, was given an MBE. An MP has written to the Cabinet Office demanding to know whether Jean Cobb received “preferential treatment” when she was included in the Queen’s Birthday Honours List of June 2002 for her work for the charities Lord Levy heads.

Norman Lamb, chief of staff to Sir Menzies Campbell, the Liberal Democrat leader, questioned whether the work Ms Cobb had performed merited such recognition.

Sir Alistair said that the cash-for-peerages investigation came down to a question of standards. He said that if the whole point of the electoral commission Mr Blair set up was to make the funding of and donations to political parties transparent, then Mr Blair had failed to meet his own ethical standards, even though he could say in a technical sense “I didn’t break the rules”.

Police arrested Lord Levy last week over the honours affair. No charge has yet been brought and he denies all the allegations.

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