TATTON MP George Osborne was at the centre of a damaging political storm on Monday after allegations he tried to solicit a £50,000 donation for the Tories from a Russian billionaire.

The Shadow Chancellor categorically denied any wrong doing after claims by his former friend, banking heir Nathaniel Rothschild, that he had "solicited" a donation to the party from Oleg Deripaska during a dinner party in Corfu aboard a yacht belonging to the Russian businessman.

It was further alleged Mr Osborne and chief Tory fundraiser Andrew Feldman had discussed channelling the money through one of the Russian Billionaire’s British companies, Leyland Daf.

Mr Osborne swiftly denied the claims saying: "We didn’t ask for money; we didn’t receive any."

Under electoral law, overseas residents cannot make donations to UK political parties.

After an embarrassing furore at Westminster when he was forced to reveal further details of the events which led to the allegations he went on to add: "There was no discussion about how a donation by Mr Deripaska could be concealed or channelled."

"People make suggestions all the time about donations to the Conservative Party, but we are always clear and rigorous [in assessing these]."

He added that he had met Mr Deripaska on the yacht on two occasions and had given a full chronology, detailing the times and lengths of the meetings.

"I certainly regret all the fuss and the misunderstanding that has come out of the trip to Corfu."

Mr Rothschild, who was at Oxford with the Tatton MP, claimed there were witnesses to the conversations, including James Goodwin, a former advisor to President Clinton, a prospective non executive director of Rusal, Mr Deripaska’s aluminium company who was prepared to tell his version in court, if necessary.

So far Conservative party leader David Cameron has given his shadow chancellor full support saying: "I think it was the right judgement not to ask for any money and not to take any money."

Repercussions from the holiday in Corfu were laid bare after Mr Rothschild wrote a letter to The Times newspaper.

A statement from Conservative centre office said: "Both Andrew Feldman and George Osborne deny absolutely that they attempted to solicit a donation from Oleg Deripaska.

"Nor did they suggest a method by which he could conceal a donation via a British company.

"They spent a short period of time on Mr Deripaska's boat at the invitation of Mr Rothschild.

"Donations to the Conservative Party were not discussed with Mr Deripaska."

Also on board the Russian billionaire’s yacht was Lord Peter Mandleson, a close friend of Mr Rothschild, who recently returned to Government as Business Secretary and who Mr Osborne earlier alleged was "dripping poison into the ear of anyone who would listen" about prime minister Gordon Brown.