Mittal's £2m gift: Blair says thanks

New Delhi: President and Chief Executive of the world’s largest steel company Arcelor-Mittal announced a donation of £2 million to the Labour party of Britain, commending Prime Minister Tony Blair’s record since he came to power in 1997.

Blair thanked the NRI steel icon, saying that he was “delighted” to receive such a considerable donation from the "world's most successful businessmen.”

"I am delighted that Mittal, who is one of the world's most successful businessmen, has made such a generous donation. I thank him for his continued support for the Labour party," said Blair.

Mittal, the world's fifth richest man is a great supporter of the party and donated a similar amount in 2005 also.

"I am a long-term supporter of the Labour party and the work it has done in the United Kingdom to improve the overall prosperity and prospects of the country since coming to office in 1997," Mittal said.

A previous gift of 125,000 pounds at the 2001 general election prompted a political row when it emerged that Blair later wrote in support of his company, LNM, when it was trying to land a lucrative contract in Romania.

Mittal’s donation has come in time of need for the Labour party, which is struggling to avoid a financial disaster.

The police are investigating the allegations of several wealthy businessmen who lent money to the party for the last general election, and were nominated for peerage.

The Chairman of the Labour party, Hazel Blears has also showed appreciation to Mittal for his contribution.

"Mittal has been a committed supporter to the Labour Party for many years. We are grateful to everyone that contributes to the Party and greatly appreciate this very generous donation," Blears said.

The donation also comes as a relief to the Labour chiefs, who have faced difficulties persuading rich supporters to donate funds, since last year’s launch of

Scotland Yard's investigation into allegations of the sale of honours.

Metropolitan Police Deputy Assistant Commissioner John Yates is expected to report to the Crown Prosecution Service soon on his inquiries, after interviewing Blair at Downing Street last month.

The party also has certain deadlines to meet in terms of paying back loans. Seven million pounds was due to be repaid by the end of 2006, with a further 11

million pounds this year, according to documents released in November last year.

The party said at that "acute cash-flow problems" were preventing it from paying back the due loans.

The party has debt of more than 23 million pounds, according the Electoral Commission. However, the Labour spokesman said that the new donation would not be used to pay off outstanding loans.

"This money will allow the party to continue to make investments to meet the electoral challenges we face over the next year," he said.