By Ian Dunt
Letters sent by William Hague to the prime minister between 1999 and 2000 in an effort to secure Michael Ashcroft's peerage look set to prolong the controversy surrounding the party donor.
Today's Guardian also reports that Lord Ashcroft was rejected for a peerage twice specifically because of his tax status.
Lord Ashcroft prompted a tidal wave of negative headlines about the opposition all week by admitting he was a non-dom on Monday.
Yesterday, the Conservatives tried to return fire against Labour by launching a freedom of information request concerning a Labour donor, but the move failed to hinder the momentum of the story, which may now be doing their election campaign real damage.
A poll for the Sun today saw the party drop two points since the controversy began, with David Cameron now on 38% (down one point) and Labour on 33% (up one).
In a letter to Tony Blair following one rejection by a House of Lords vetting committee, Mr Hague confirmed Mr Ashcroft was "non-resident for tax purposes".
He then wrote: "He is committed to becoming resident... This decision will cost him (and benefit the Treasury) tens of millions a year in tax yet he considers it worthwhile."
When a second nomination was turned down, Lord Thompson reportedly wrote to Mr Blair saying it required "firm evidence of an unequivocal decision by Mr Ashcroft that he will have taken up residence in the UK, on a permanent basis" before his ennoblement could go through.
Douglas Alexander, Labour's general election coordinator, drove home his attack on the Mr Hague in the wake of the Guardian revelations.
"William Hague has repeatedly told the public that Lord Ashcroft 'complied with the commitments that he gave'," he said.
"Given the terms of William Hague's letter to the then prime minister on May 23rd 1999, the question he must now answer is did he repeatedly mislead the British public or was he repeatedly misled by Michael Ashcroft?
"The truth about this issue has been concealed for a decade. William Hague must now end this week's silence and answer what he knew about Michael Ashcroft's status and when.
"The evasion and obfuscation must now end."
Meanwhile, the Liberal Democrats opened up a new front by calling on HM Revenue and Customs to conduct an inquiry into whether Lord Ashcroft's 'permanent residence' in the UK was compatible with his 'non-domiciled' status for tax purposes.