TONY BLAIR has vetoed the appointment of an independent regulator to oversee the conduct of government ministers and their spouses.

The regulator would have been able to advise Tessa Jowell over whether the mortgage loan transaction, part of the controversy involving her husband David Mills, was within the ministerial code of conduct.

The Prime Minister agreed in September 2003 to create the first post of outside regulator of ministerial conduct after pressure from the Committee on Standards in Public Life.

In November Jim Murphy, the Cabinet Office Minister, in a Commons debate initiated by the Tories, confirmed the plan and said that there would be action in the near future. The Prime Minister had endorsed the recommendation in September 2003, stating: “Where a minister’s interests are not straightforward permanent secretaries should consult the independent adviser either during the course of their discussions or when they have completed them to seek confirmation that the correct course of action has been taken.”

But Downing Street has now quietly dropped the pledge, citing as justification the fact that the Public Administration Select Committee of MPs was conducting an investigation into whether outside regulators were effective. A Cabinet Office spokeswoman said: “The Government will want to consider this appointment in the light of the committee’s conclusions and recommendations." The retreat was criticised by Sir Alistair Graham, the chairman of the Standards in Public Life Committee, who said: “The case for an adviser was fully set out in April 2003. The Government should not prevaricate any longer but proceed with an appointment as soon as possible.”

A Whitehall source said: “This appointment is about sparing ministers and the Government from embarrassment yet still Downing Street is hostile to it. It is clear that the Government has gone from a position of accepting the case for an adviser to holding back and using the select committee inquiry as an excuse for doing absolutely nothing.”

A Tory party spokesman said: “We have been waiting for this for more than two years. The Government should immediately begin the process of establishing such a position. The Government has always made the right noises over standards in public life. Fine words, little action.”

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