Robinson 'not wanted' at DTI

Michael Scholar, the DTI's Permanent Secretary, has warned Downing Street privately that he does not want Mr Robinson to come ''anywhere near'' his department.

Sources say he fears there is a risk of further revelations about the Paymaster General's complicated financial interests which could reignite the controversy surrounding Mr Robinson and embarrass the DTI by undermining its role as a promoter of ethical business policies.

Mr Scholar, a former private secretary to Baroness Thatcher, is understood to have stepped in after hearing that Tony Blair was preparing to switch Mr Robinson to the DTI later this month.

The revelation has infuriated Mr Robinson's supporters, who say he is the victim of a smear campaign that has overshadowed his valuable work promoting the Government's links with business.

And it will raise fresh questions about the relation between politicians and civil servants amid allegations that in some departments, in particular the Foreign and Commonwealth Office, senior mandarins have clashed with their elected Ministers.

It is understood Mr Scholar took the highly unusual step of communicating his views about Mr Robinson to Sir Richard Wilson, the Cabinet Secretary who reports directly to the Prime Minister.

A source said: ''Mr Scholar let it be known that he doesn't want Geoffrey Robinson anywhere near his department. He has told colleagues that Mr Robinson would be dangerously exposed at the DTI.''

His extraordinary intervention has angered Ministers, who see it as a breach of the convention that says reshuffles should be entirely at the Prime Minister's discretion.

It suggests civil servants remain unhappy about last year's revelation that Mr Robinson is the discretionary beneficiary of a #12m tax-free offshore trust based in Guernsey.

''Mr Robinson has had a huge number of business interests during his career, from Jaguar to Robert Maxwell. You never quite know what's next with him,'' one source said.

The Labour MP for Coventry North West is one of the few millionaire businessmen in the Government. His connections with industry have been vital in securing support for projects such as the New Deal for young unemployed and the Private Finance Initiative.

DTI Ministers led by Trade President Margaret Beckett have praised Mr Robinson's work masterminding the Government's review of energy policy. He is credited with ''knocking heads together'' in negotiations with the electricity generators over the future of the coal industry.

Mr Scholar's warning will be taken seriously in Whitehall, where he is a highly respected figure. A civil service high flier tipped for eventual promotion to Cabinet Secretary, he worked in

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academia and the City before taking on a succession of senior posts at the Treasury.

Observers have expressed surprise over Mr Scholar's objection to Mr Robinson, as the DTI is home to another businessman turned politician, the former BP boss Lord Simon, who is now in charge of business preparations for the European single currency. In addition, there has been no objection voiced by civil servants to the appointment of media tycoon Lord Hollick as a part-time special adviser to Mrs Beckett.

Mr Robinson has strong supporters in Mr Blair and Chancellor Gordon Brown, who value his willingness to serve as trouble-shooter on a range of thorny issues where close links with business leaders is vital. Despite the controversy surrounding his business dealings, there has so far been no evidence of wrongdoing.

However, the Prime Minister is reported to be considering switching Mr Robinson to another department to take him away from the Treasury spotlight, where his involvement in an off-shore trust contrasted with the Chancellor's moves to clamp down on tax avoidance.

He is now tipped to replace Dr Gavin Strang as Transport Minister, where he will spearhead attempts to reinvigorate London Underground using #7000m in PFI funding.

Other likely Cabinet-level victims of the reshuffle, expected over the Whitsun weekend in a fortnight's time, include Dr Strang, Chancellor of the Duchy of Lancaster David Clark and Social Security Secretary Harriet Harman.

Speculation last night also centred on possible moves for Scottish Office Minister Brian Wilson to a transport role, and Treasury Minister Helen Liddell to the Scottish Office.