OSBORNE ADMITS DONATION 'MISTAKE'

In his first public comments for nearly a week, the shadow chancellor acknowledged his involvement in discussions of a gift from Russian oligarch Oleg Deripaska "did not look very good".

"I neither asked for money nor received any and I didn't break any rules but I think I did make a mistake," he told BBC Radio 4's The World at One.

The admission came as the European Commission again knocked back calls for a probe into Peter Mandelson's contacts with the billionaire. Officials in Brussels said there was still "no evidence" suggesting the new Business Secretary had breached rules on conflicts of interest during his four-year stint as trade commissioner.

The decision - despite Lord Mandelson revealing that his contacts with Mr Deripaska stretch back two years further than previously known - threatened to return the spotlight to Mr Osborne's summer holiday activities.

But Mr Osborne tried to head off further damage by announcing that he would no longer take part in any discussions about individual donations to the party. "I think in politics it is not just what you say or what you do, it's how things look," he said. "If I am absolutely honest this didn't look very good and I regret that."

The row erupted last week when an old friend of the shadow chancellor from Oxford, banking heir Nat Rothschild, accused him of trying to "solicit" a loan from Mr Deripaska.

In a series of claim and counter-claim, Mr Osborne has admitted meeting the billionaire on his yacht, which was moored near Mr Rothschild's villa on the Greek island of Corfu.

He has also confirmed he was present when Mr Rothschild discussed the possibility of the Russian making a donation with Tory Party chief executive and fundraiser Andrew Feldman. Their conversation included a discussion about whether Mr Deripaska - who, as a foreigner, is banned from making individual donations - could make a contribution through his British-based company, Leyland DAF.

However, the Tories insist the matter was never discussed directly with Mr Deripaska, and no donation was ever made. Mr Rothschild spoke out after apparently blaming Mr Osborne for leaks of private conversations with Lord Mandelson - who was also holidaying with them on Corfu.