Billionaire, Lakshmi Mittal's latest deal to acquire Romanian steel making business Sidex has become mired in controversy. At the centre of the furore is the question of UK Prime Minister Tony Blair's role in clinching the multi-million pound deal for Mr Mittal, the steel magnate.

In answer to questions yesterday about the Prime Minister's letter to the Romanian Prime Minister regarding Lakshmi Mittal's bid for nationalised steel company Sidex, the Prime Minister's Official Spokesman underlined that the letter had been written as a direct result of a recommendation suggested by the British Ambassador to Bucharest and had subsequently been endorsed by the Foreign Office.

It seems that neither the Ambassador nor the Foreign & Commonwealth Office had been aware that Mr Mittal had donated £125,000 to the Labour Party that year. Both had suggested writing the letter because of the transformation going on within Romania, particularly in terms of the restructuring of its economy - of which Sidex was playing a very important part.

The letter, in which the Prime Minister said: "I am particularly pleased that it is a British company which is your partner. This should send a very positive signal to investors and businessmen in Britain and more widely. Together with the other measures you are taking, I hope it will stimulate renewed interest by British business in Romania" has further enraged members of the Plaid Cymru who argue that Corus, as opposed Mr Mittal's LNM group, is the chief provider of steel jobs in Britain.

Lakshmi Mittal's company, LNM is an international conglomerate headquartered in London. ISPAT International is the LNM subsidiary that operates in the steel-making industry. The company employs around 125,000 worldwide but has only about 100 people based in the UK. The company itself is registered in the Dutch Antilles. Mr Mittal whose company was valued at around £1.2billion in 2001 regularly tops the Asian Rich List.

Downing Street countered accusations by stating that " it was in this country's interest for its businesses to be helped to open up new market and that the Government had spent £60m to help the steel industry in the UK adapt."

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