According to a report in The Sunday Times, in July 1995 the Hinduja Foundation, a charity run by the NRI businessmen Hinduja brothers, paid nearly 1,200 pounds to Mapesbury Communications, a company set up Mr by Vaz a year earlier.

Mapesbury allegedly received the money in return for helping to organise a Hinduja-sponsored reception at the House of Commons. Ms When Filkin asked Mr Vaz last year if he had ever received money from the Hindujas, he wrote back: ``No donation has ever been made by the Hinduja brothers,'' the report said.

While Andrew Lansley, shadow minister for the cabinet office, said after considering the evidence he would be writing to Ms Filkin asking her to reopen the case, a spokesman for Mr Vaz said that the Hindujas were not the Hinduja Foundation; Mapesbury was not Mr Vaz or his office; and that Mr Vaz derived no income from the Mapesbury. The Tories have called for Mr Vaz's resignation saying that the evidence amounted to a ``catalogue of evasion, of intimidation and of wilful obstruction of the parliamentary process.''

In the meantime, the report quoting the prime minister's office said that Mr Vaz retains the backing of Prime Minister Tony Blair and will continue to do so unless something is proven against him.

Home Secretary Jack Straw on Saturday defended Mr Vaz saying that many Asians in Britain believed that Mr Vaz had become the victim of a press ``witch-hunt'' because of his race.

In the meantime, The Observer sought a new investigation into Mr vaz, saying he had personally ``overturned decisions by immigration officers an unprecedented 50 times since he took charge of overseeing visa applications to Britain in October 1999.''

A spokesman for the foreign office denied there was anything improper about Mr Vaz's overrulings.

(PTI)