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Deputy to UK's Blair denies sleaze, vows to stay

Written by: Staff

LONDON, July 6 (Reuters) Britain's parliament today launched a full inquiry into contacts Prime Minister Tony Blair's deputy had with an American billionaire hoping to open a London casino.

Deputy Prime Minister John Prescott has denied any wrongdoing in the affair, which has caused the latest of a string of damaging headlines for him and threatened to undermine Blair's own already precarious position.

If Prescott is forced out of office, calls could grow for Blair to leave much sooner than planned after he said he would not seek a fourth term, the prime minister's allies fear.

Prescott is accused by some local officials and opposition politicians of abusing his power to assist US oil and entertainment mogul Philip Anschutz in a bid to open a casino at London's Millennium Dome.

Parliament's Standards' Commissioner said he would launch a full inquiry over a visit by Prescott to Anschutz's Colorado ranch and whether it should have been declared.

''Following preliminary enquiries, the Commissioner has decided to look at the issues around the hospitality,'' said a spokeswoman for Commissioner Philip Mawer.

He plans to report back towards the end of July.

Prescott, due to run the country when Blair is on holiday over the summer, has said he met Anschutz seven times and stayed at his ranch but he vigorously denied seeking to influence officials to grant Anschutz the gambling licence.

''I wasn't involved in it, didn't even know about it until I read it in the press and totally reject any idea that I expressed any pressure whatsoever,'' Prescott told BBC Radio.

An advisory panel is still deciding where to locate a sole regional or ''super'' casino with the Dome -- a failed government project on the banks of the River Thames -- a top contender.

Blair's feisty deputy, known for punching a member of the public who hurled an egg at him at a 2001 election rally, embarrassed Labour earlier this year by admitting to an affair.

Blair, who promised Labour would be ''whiter than white'' when it took power in 1997, has consistently backed Prescott.

But he stripped him of most governmental responsibilities, and Prescott was forced to give up a free official country home after he was spotted playing croquet there in working hours.

Asked if he would resign, he said: ''I'm staying''.

Many Labour lawmakers fear the headlines are having a corrosive effect on the government's reputation.

The furore over Prescott is thwarting Blair's efforts to switch the media focus off stories of sleaze and mismanagement.

The bad press has put pressure on him to name a date for his exit from office before the next election expected in 2009.

Prescott is seen as key to an orderly transition of power. The former ship's steward has links to Labour's left wing and is one of the few figures seen able to soothe tensions between Blair and his likely successor, finance minister Gordon Brown.

Reuters SB GC1716

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