Miliband threatened with legal action over tax claims

ED Miliband was threatened with legal action yesterday after branding a wealthy Tory donor a tax dodger.

Former Conservative treasurer Lord Fink dared the Labour leader to repeat his slur outside Parliament. Inside the House, MPs can speak without being sued.

A Labour party spokesman said Mr Miliband was ready and willing to do so. The extraordinary prospect of Mr Miliband picking a fight with the millionaire dubbed the “godfather of hedge funds” came after the Labour leader slammed “dodgy” donors to the Conservatives.

The row centred on what the Government knew about allegations that a Swiss branch of the HSBC bank had helped clients to avoid tax. In furious Commons clashes, Mr Miliband branded David Cameron “a dodgy Prime Minister surrounded by dodgy donors” who was “up to his neck” in the tax scandal.

That came after a report that clients of the HSBC Swiss branch included Tory backers who had between them given the party some £ 5million. Mr Miliband singled out Stanley Fink, who gave the Tories nearly £ 3million.

He told Mr Cameron: “You appointed him as treasurer and gave him a peerage for good measure.

“Can you explain what steps you are going to take to find out about the tax avoidance activities of Lord Fink?”

Lord Fink later wrote to Mr Miliband saying it was “untrue and defamatory” to say he had been involved in “tax avoidance activities”.

He continued: “I challenge you to repeat your allegation outside the House of Commons – or to withdraw it publicly.”

The peer said he had operated a Swiss bank account because he had worked in the country for four years and he needed it to receive his salary “and pay grocery bills”.