TONY BLAIR was mired deeper in sleaze allegations yesterday as it emerged that a fourth millionaire Labour backer was blocked for a peerage because the Prime Minister twice defied calls to reveal secret loans.

Mr Blair refused to tell the independent watchdog twice in the past ten days that Sir Gulam Noon, the “curry king”, had made “soft” loans to Labour, The Times has learnt. Sir Gulam, 70, spoke last night of his bitterness at being abandoned by the Labour Party as the Lords Appointments Commission ended his hopes of becoming a peer.

Mr Blair bypassed Labour’s fundraising committee set up to fight sleaze by personally agreeing to accept “soft” loans — cash advances from wealthy backers rather than banks on flexible repayment terms, some of which were expected to be converted into gifts.

The furore surrounding Mr Blair’s decision to accept secret loans led Sir Alistair Graham, chairman of the Committee on Standards in Public Life, to say that the Government risked the same accusations of sleaze as the troubled administration of John Major. A poll yesterday showed that the public considered the Blair and Major governments equally sleazy.

Sir Alistair, in his most outspoken remarks about Mr Blair, said: “The problems have come because of a lack of honesty and transparency in some of the arrangements that have been made. Obviously the loans should have been made public and have not.

“This Government is clearly in danger of attracting the sleaze label that was so clearly pinned on the previous government.”

Mr Blair’s problems deepened when John Prescott, the Deputy Prime Minister, said that he could not be certain that Labour did not sell peerages. Asked for a categorical assurance that honours were not for sale, he said: “I think we have to look a lot more at this before you come to those conclusions.” Mr Prescott later said he had not meant to suggest peerages were for sale, and there was no evidence that they were.

John Hutton, the Work and Pensions Secretary, said: “I don’t think anyone feels comfortable about what has gone on. I don’t think anyone is suggesting that any law has been broken.”

But Geoff Hoon, the Leader of the Commons, accepted that people thought Mr Blair had given peerages for loans. “That is the perception that sadly today many people have,” he said.

It led Sam Younger, chairman of the Electoral Commission, to challenge Mr Blair and the Conservatives to publish the names of all secret lenders.

A Labour spokesman said that it was up to the lenders to make their loans public, not the party. He could not say if the lenders were being asked by Labour to go public for the sake of transparency.

The Times has learnt that No 10 was telephoned by the Lords Appointments Commission on March 10, demanding to know if any other nominees had undisclosed financial links to the Labour Party. The call was made on the day The Times disclosed that Sir David Garrard, who had been blocked for a peerage, had given a loan of more than £1 million.

Last weekend Baroness Dean of Thornton-le-Fylde, the Labour member of the commission, warned No 10 to disclose any more covert loans or risk losing more peers from the list. Yet No 10 failed to tell the commission that Sir Gulam, who had been nominated for a peerage, had made a loan of £250,000. The response from the commission, set up by the Prime Minister in 2000, was swift. Sir Gulam’s nomination was blocked.

A Labour source said: “It’s now quite clear to me that if Gulam Noon’s loan had been made known to the commission, his name would still be on the list of peers. He is a self-made man. He has been badly let down as he is exactly the sort of person who should be in the Lords.” Sir Gulam, who has given more than £200,000 in donations, was persuaded by Labour to give the £250,000 as a loan to help the party’s £17 million election campaign.

Lord Sainsbury of Turville, a minister in the Department for Trade and Industry, said last night that he had lent the party £2 million. The peer, who is Minister for Science and Innovation, made the loan last year on commercial terms. He said he informed the Permanent Secretary at the DTI in accordance with ministerial rules.

Lord Sainsbury, whose wealth is derived mainly from the supermarket empire, is thought to have donated £6.5 million to Labour since 2002.

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