Thursday, October 23, 2008

Don't cross me again, warns Tory's accuser.

Nat Rothschild has warned the Tories not to question him again on his version of what transpired at his villa on Corfu between George Osborne and the Russian oligarch Oleg Deripaska, where Rothschild has alleged that Osborne sought to evade UK electoral law and arrange for £50,000 to be donated to the Tory coffers.

He has warned the Tories that Osborne will be destroyed if they continue to question his version of events.

Declaring a form of uneasy truce, friends of Rothschild said he did not at this stage want to escalate the public battle with his old friend. They said Rothschild had not intended to bring Osborne down by disclosing the shadow chancellor's involvement in talks about raising money from Deripaska. Instead, the friends said, Rothschild had intended it as "slap on the wrist" because he was furious that Osborne had breached confidences in an attempt to damage Labour business secretary Lord Mandelson.

The friends added that given his deep social connections with the Conservative party, Rothschild did not want the battle to deteriorate or lead to a mutually destructive court case.

But a source close to Rothschild said: "If anything is put out that in any way contradicts what he has said, Nat will come back." Rothschild has insisted that Osborne did solicit funds, contradicting the shadow chancellor's account.

It sounds to me as if Rothschild has more than enough to bury Osborne and that the remnants of their friendship forces him to warn Osborne and the Tory leadership that, if they continue to pursue this foolish course, what happens next will be on their own heads.

Gordon Brown has already called for an official investigation into whether or not Osborne sought ways to evade the law to secure an illegal donation.

And it transpires that Mandelson had previously sent a warning to Cameron and Osborne that he knew something "explosive" about Osborne, although there is no indication that Mandelson had any prior knowledge of Rothschild's tempestuous decision to go public with his outrage at Osborne's indiscretion over events at Rothchild's house. Senior Tories are admitting that both Cameron and Osborne were warned that Mandelson was aware of Osborne's attempt to solicit funds from Deripaska shortly after Osborne began leaking details of Mandelson's indiscretions on Corfu.

This makes Osborne's continual leaking an act of suicide or extreme arrogance. Perhaps Osborne thought that Rothschild, his old friend, would back his version of events. If he did so, it was a terrible miscalculation.

There are reports that a "traumatised" George Osborne is being told by senior Tories that he showed "poor judgement" in his dealings with Mandelson and Rothschild.

One senior figure close to the highest echelons of the party said the shadow chancellor had been "ill advised" to brief against Mandelson on his return from the Rothschild villa in Corfu.

"George Osborne has not done anything wrong," the frontbencher said. "But he was ill advised to leak the comments from Peter Mandelson."

Yes, it was extremely "ill advised" to throw stones at as astute a political operator as Mandelson when you are yourself living in a glass house. Another word for that is moronic. The man's nickname is the Prince of Darkness for God's sake, so no-one would half a brain would go after him unless your own hands were as white as the driven snow.

I feel quite sure that Osborne, under advice from Cameron and with Rothschild's warning ringing in his ears, will now attempt to let the matter drop. But Labour have the bit between their teeth and must surely sense blood. They will continue to pursue whether or not Osborne attempted to circumnavigate the law with all the memories that produces of cash in envelopes and the sleaze that brought down John Major's government.

Rothschild will now no doubt now get his wish, and Osborne will fall silent on this matter, but the Labour Party won't.

Osborne isn't out of the woods by a long chalk.

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