Unions and politicians were divided yesterday over why Prime Mnister Tony Blair did not do more to save thousands of steel jobs last year, yet intervened on behalf of a Labour party donor's bid to buy a Romanian state firm.

A row grew over Mr Blair's backing by letter of an attempt by tycoon Lakshmi Mittal to take over the Sidex steel company, following his £125,000 donation to Labour.

Leader of the Commons Robin Cook said there was no connection between the loss of steel jobs in the UK and the support of Mr Mittal's bid for the company.

But Tony Poynter, of the Teesside Multi-Union Steel Committee, said: "I do not think it is in the interests of the UK steel industry for the Government to support a bid for a foreign competitor."

The Prime Minster's letter was a disadvantage and made more difficult the task of concentrating on UK steel jobs.

Mr Blair was backed by North-East Labour MPs.

Vera Baird, MP for Redcar, said she had initially been worried over reports of Mr Blair's backing of Mr Mittal's bid, but was reassured by the Iron and Steel Trade Confederation union's comments that the Prime Minister had done what he could to save UK jobs.

Ashok Kumar, MP for South Middlesbrough and East Cleveland, said he supported the Prime Minister's efforts in support of Mr Mittal.

"In February last year, long before his Labour Party donation, I lobbied to support Mr Mittal in trying to buy the Teesside coil plate mill and I am certain that Mr Blair did everything he could," he said.