Tony Blair has received a direct request to investigate claims that John Prescott's meetings with an American billionaire were in breach of the ministerial code.
Liberal Democrat culture spokesman Don Foster has written to the prime minister demanding that a full probe be launched into his deputy's discussions with Philip Anschutz, whose company is bidding to host Britain's first super-casino.
He also condemned the Conservatives for twice asking cabinet secretary Gus O'Donnell to launch such an investigation, when only Mr Blair could take a decision on this matter. He said they were making a "total mess" of holding the government to account.
"There are still clearly unanswered questions relating to John Prescott's dealings with Mr Anschutz. The prime minister must agree to undertake a full investigation of whether Mr Prescott broke the ministerial code, or suspicions of wrongdoing will linger," he said.
Shadow culture secretary Hugo Swire wrote a second letter to cabinet secretary Gus O'Donnell today calling for an investigation into Mr Prescott's behaviour, in particular his weekend stay at Mr Anschutz's Colorado ranch last July.
It was prompted by Mr O'Donnell's failure to make any mention of the deputy prime minister in his reply to the first letter. A Cabinet Office spokesman explained this was because it was not Sir Gus's responsibility to investigate breaches of the code.
The Lib Dems have now seized on this, with Mr Foster saying: "The Tories have made a total mess of holding the government to account over this affair.
"They have twice written letters to the wrong individual demanding an investigation, and even requested the wrong issues to be investigated. Yet again only the Liberal Democrats are proving to be an effective opposition."
His letter to Mr Blair notes that Mr Anschutz, who owns the Anschutz Entertainment Group (AEG), has "significant interests" in the Dome and is seeking permission for a regional casino as a central feature of his business plan for the building's redevelopment.
"In his roles as deputy prime minister, chair of the cabinet domestic affairs committee and then head of ODPM, John Prescott has significant involvement in decisions in respect of gambling policy and plans for new casinos," Mr Foster wrote.
He added: "Notwithstanding the late declaration of the visit in the register of members' interests [which is now being investigated by the parliamentary watchdog], it is clear that Mr Prescott did receive hospitality from Mr Anschutz.
"Since the donation made to a charity to cover the accommodation costs was paid from public funds there is clearly a public interest issue involved. I will be grateful, therefore, if you will investigate this matter to ensure that there was no breach of the ministerial code."
Mr Prescott yesterday vehemently denied any conflict of interest between his meetings and AEG's casino bid, and earlier this week, Mr Blair told senior MPs: "If I think there is reason to believe that someone has broken the ministerial code, I will take action."
In his second letter to Sir Gus, Conservative MP Mr Swire said that as Mr Prescott's public duties included responsibility for planning regulations for casinos and the disposal of the Dome, a probe was vital to ensure no conflict or even apparent conflict of interest.