PAUL DRAYSON, the chairman of Powderject, vowed to continue giving money to the Labour Party despite the controversy that erupted when his company won a pounds 32m Government contract to supply smallpox vaccine.

The company said yesterday it was heading towards a pounds 25m profit this year, higher than analysts had been forecasting. The City believes the smallpox contract will contribute pounds 10m to profits over the coming two or three years.

Mr Drayson has made two pounds 50,000 donations to Labour, one in December, weeks before tendering for the smallpox contract got under way.

He maintained Powderject won the contract "fair and square" in a bidding war against four rivals. "I am a Labour supporter and I will continue to support them regularly, in an entirely personal capacity. The two things are entirely separate."

Moreover, he dismissed suggestions that he had misused his position as head of the industry lobby group, the BioIndustry Association, during the process of tendering for the smallpox contract. A BIA taskforce talked with the Government in the wake of 11 September about carrying out an audit of the industry's capacity to supply vaccines and other medicines for use in the event of a bioterrorist attack.

"Those discussions were about an exchange of information and explicitly avoided commercial discussions. All meetings took place with all 10 companies present, and I did not have any private discussions with Government."

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