Questions over 'blind trust' use

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Lord Mandelson was one of five ministers whose use of the arrangement meant that their financial investments did not have to be revealed in full in the list of ministerial interests published by the Cabinet Office.

And it emerged that the Ministerial Code of Conduct was amended after Gordon Brown came to power to remove a warning about the use of the arm's-length trusts, which allow funds to be invested without ministers' direct knowledge or involvement.

An earlier versions of the Code, which sets out guidance on ethics and procedure, said ministers may want to place investments in an externally-managed blind trust, to avoid any appearance of conflict of interest.

But it added: "It should also be remembered that even with a trust the minister could be assumed to know the contents of the portfolio for at least a period after its creation, so the protection a trust offers against conflict of interest is not complete."

This caveat, introduced in 2005 under Mr Brown's predecessor Tony Blair, was removed when the Code was revised in July 2007. Mr Blair himself had a blind trust to avoid conflicts of interest while Prime Minister, but it sparked controversy in 2002 when it emerged that his wife Cherie used money from it to buy two flats in Bristol.

The existence of Lord Mandelson's trust was revealed when the list of ministers' interests was published for the first time, fulfilling a pledge of greater transparency made by Mr Brown shortly after his arrival at 10 Downing Street.

The document revealed that Trade Minister Lord Davies, Health Ministers Ben Bradshaw and Lord Darzi and Treasury Minister Lord Myners have also set up blind trusts to handle their financial investment.

Liberal Democrat MP Norman Baker said the information provided did not go far enough and called on Lord Mandelson for further disclosures.

For Tories, shadow Commons leader Alan Duncan said: "It's taken two years to drag out this supposed 'annual' report from the Prime Minister. Now we discover that it's virtually identical to the MPs' register and that Lord Mandelson and his colleagues are concealing their financial interests behind blind trusts."