The tories demanded a full inquiry last night into the business dealings of the former paymastergeneral, Mr Geoffrey Robinson, dubbing him "the Godfather of New Labour", as the British Prime Minister, Mr Blair, attempted to put a lid on the affair.
Mr Peter Lilley, the deputy Tory leader, wrote to the Cabinet Secretary, Mr Richard Wilson, asking him to investigate how many ministers had been offered loans by the millionaire businessman.
Mr Michael Howard, the shadow foreign secretary, demanded to know to what extent Mr Robinson had "bankrolled" Mr Gordon Brown's office when Labour was in opposition.
The Tory pressure came as Mr Blair finally broke his silence over the resignation of his personal friend, the former trade secretary, Mr Peter Mandelson.
Mr Blair admitted Mr Mandelson had "made a mistake" in not declaring the £375,000 loan he took from Mr Robinson to help pay for his £475,000 house in a fashionable part of west London.
But he rejected Tory claims that he spent six days dithering over the affair.
Mr Mandelson confirmed a report that he had accepted a free flight in the private jet of an American underwear millionaire, Ms Linda Wachner, and failed to declare it to parliament.
The Sunday Mirror claimed Mr Mandelson still had a £100,000 mortgage outstanding on a flat in London when he sought the loan from the Britannia building society for his house.
A Treasury source rejected as "completely and unequivocally untrue" reports that three other unnamed cabinet ministers were approached by Mr Robinson with offers of cash to help them buy new homes in London.
As Mr Blair left for a family holiday in the Seychelles, Mr Howard insisted that several important questions remained unanswered. "It's becoming clear now that Geoffrey Robinson was the godfather of New Labour, offering all sorts of people large loans to buy houses.
"We need to know how many other ministers were indebted to him. What was the true financial relationship between him and Gordon Brown?
"To what extent did he bankroll Gordon Brown's office, and is it really the case that the inquiry into Geoffrey Robinson's affairs which is being conducted by the DTI is entirely untainted by all these dealings?" he asked on BBC Radio 4's The World This Weekend.
Mr Howard also criticised the Prime Minister for not acting sooner, saying Mr Blair had known all the facts six days before Mr Mandelson resigned.
Mr Blair said on BBC Radio 4's Broadcasting House programme that Mr Mandelson's resignation was "a personal tragedy". He should have declared the home loan when the Department of Trade and Industry was inquiring into Mr Robinson's affairs, he said. "He made a mistake, he did something wrong, and he paid a very heavy penalty for it."
He went on: "What is important now is that we keep a sense of perspective about it. The government goes on, we move on, and the New Labour programme, the New Labour government, remains in place and we carry on delivering on our promises."
He said he had found out about the loan only two or three days before Mr Mandelson resigned.