Mandelson defended in smear row

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Lord Mandelson, now the UK's Business Secretary, has been accused of giving multimillion-pound trade concessions to a Russian aluminium billionaire who entertained him on his superyacht.

But David O'Sullivan, Director-General of the Commission's trade department, denied that Lord Mandelson personally intervened to influence decisions on aluminium import tariffs.

The allegations were raised in the Commons earlier, when Commons Leader Harriet Harman dismissed Tory calls for a debate about press claims which she described as "unjustified" smears.

The claims centre on Commission decisions taken on Lord Mandelson's watch which allegedly resulted in businessman Oleg Deripaska gaining up to £50 million a year thanks to changes in EU import duties.

Mr O'Sullivan, who worked closely with Lord Mandelson during his four years in Brussels, said in an open letter to British newspapers that all relevant decisions had been taken in line with EU law, transparently, and in the interest of EU companies and consumers.

The letter declared: "I am very surprised by the allegations in the British Press about Peter Mandelson, Oleg Deripaska and aluminium. The claims that have been made in various newspapers hint to Peter Mandelson's personal intervention in his capacity of European Commissioner for Trade in favour of the Russian aluminium company RUSAL. I would like to clarify that no such intervention ever took place."

He says decisions on tariffs and "anti-dumping" duties on Russian aluminium were "based on sound facts".

The letter acknowledges that Lord Mandelson "facilitated a compromise proposal in 2004 which cut raw aluminium tariffs from six to 3%".

Reports of Lord Mandelson's links to Mr Derispaska have appeared in the Sunday Times and Times newspapers and the Daily Telegraph.