- guardian.co.uk, Wednesday 5 April 2000 01.33 BST
London Labour MP Brian Sedgemore wrote to the Trade and Industry department permanent secretary, Sir Michael Scholar yesterday, demanding a full inquiry into claims that Mr Livingstone had broken criminal law by using a £40,000 loan from his company to buy a holiday home.
But DTI sources privately downplayed the prospect of an inquiry into the allegations while accountants and company lawyers said it was unclear that there had been any offence, let alone a criminal one.
The loan, made by Mr Livingstone's company Localaction on the advice of his accountant, turned out to be £23,076 rather than £40,000 and was repaid well before the Brent East bought a £168,000 house in Brighton with his partner Kate Allen last summer.
After launching his purple double decker campaign bus yesterday, the former Greater London council leader insisted there had been no breach of company law and said Labour officials had "deliberately or accidentally got the legal position wrong, given it to their closest cronies in the media and now it's blown up in their faces. This must be becoming seriously counter-productive".
A Labour spokesman denied any dirty tricks campaign against Mr Livingstone, while a spokesman for Frank Dobson, the party's official London mayoral candidate, said: "Londoners need to know they have a mayor they can trust to fight for Londoners and not for themselves. How many more revelations are there about Ken Livingstone's outside earnings?"
Meanwhile, Tory candidate Steve Norris yesterday predicted that the mayoral election on May 4 would be a two-horse race between him and Ken Livingstone, with Mr Dobson heading for a humiliating defeat in third place.
