Spotlight moves to Tories as loans from foreign businessmen revealed

Two foreign businessmen who lent the Conservatives a total of £3.5m before the last general election were revealed yesterday amid continuing pressure on the party by the Electoral Commission to disclose the full list of secret lenders.

Michael Hintze, a naturalised Australian businessman, outed himself on a Tory activist website run by Iain Dale, the defeated Tory parliamentary candidate for Norfolk North, revealing he had made a £2.5m loan to the party.

The second foreign lender was named by the Observer as Johan Eliasch, a Swedish sports equipment tycoon, who made a £1m loan. He was one of the principal backers of Michael Howard, supporting his bid to replace Iain Duncan Smith as leader. The loan is on commercial terms in the form of a mortgage on the party's old headquarters in Smith Square, Westminster. It has enabled the Tories to buy back the freehold of the building, which they had sold off to cut their debts, giving them an opportunity to develop the listed property to raise cash.

Mr Hintze, who is a generous donor to the arts, notably the Victoria and Albert museum, used his offshore Channel Islands company Morain Investments to provide the loan. Mr Hintze wrote on the website: "My support for the Conservative party is something I am immensely proud of and I am pleased to be able to help, both with the declared donations I have made and through the loan from the UK-based trading company, Morain UK, of which I am an ultimate beneficiary and which responded to the party's need for support by agreeing to a secured loan on commercial terms last year."

Mr Eliasch, who made millions from the Head sportswear brand, was until recently a deputy treasurer for the Conservatives and became a British citizen some time ago, according to the Observer. He has reportedly been a major lender to the party since 2004, when the Sunday Times Rich List said he had given the party a loan of £1m.

Two minor donors were also revealed at the weekend. The party confirmed its next declaration to the Electoral Commission would reveal that Rosemary Said, the wife of foreign arms dealer Wafic Said, a Syrian-born Saudi, bid £100,000 at David Cameron's first fundraising ball, for an eight-person dinner to be provided by celebrity chef Albert Roux. Nicholas Soames, former shadow defence minister, and Boris Johnson, former editor of the Spectator and the Tories' higher education spokesman, will be wine waiters. Mr Said was the middleman in Britain's biggest arms deal, the Al Yamamah deal with Saudi Arabia signed by Margaret Thatcher and renewed by Tony Blair.

Poju Zabludowicz, a Finnish property billionaire, gave the party £15,000 through a UK property firm.

Today the Electoral Commission will receive a letter from Jonathan Marland, the Tory party treasurer, saying that all existing declarations have complied with existing rules so there is no need to provide new information on existing loans.

Meanwhile, reports in the Sunday Times and Sunday Telegraph that a company founded by two property developers who lent large sums to Labour benefited from a planning decision were denied by the deputy prime minister, John Prescott.

Sir David Garrard, who lent Labour £2.3m last year, was chairman of Minerva until last April, when he stepped down and was succeeded by Andrew Rosenfeld, who lent the party £1m. Minerva is planning a £500m shopping mall in Croydon, south London.

Mr Prescott invited himself on to the BBC Politics Show to deny the claim. He said he had never met Sir David or Mr Rosenfeld and that the story claiming he had acted improperly was a "lie".

"I don't know who the companies are and I certainly don't know if they were giving money to the Labour party. It was the press last week acknowledging that I didn't know anything about the secret loans and now I am supposed to have done a deal," he said.

He said he received the planning requirements but felt the decision could be made locally. "I passed it over to Croydon and City of London Corporation. They made the decision, not me. It's quite untrue to say there was a deal or I made the decision."