Lucy Powell MP intervened in case against Labour donor

Lucy Powell urged ministers to reconsider legal proceedings against a property development firm in her constituency founded by a Labour donor in a move that could have saved his company millions, the Guardian can disclose.

- Eleni Courea Political correspondent

Powell, the favourite to be elected Labour's deputy leader this week, wrote to Angela Rayner on behalf of Urban Splash, a property development firm in Manchester founded by the party donor Tom Bloxham.

Powell asked Rayner, who was then the housing secretary, to reconsider the government's “disproportionate” legal action against the company. She had met company executives about the case two weeks prior.

Asked about the intervention, made while she was a cabinet minister, Powell said she had acted in her capacity as a constituency MP and had done so “openly and transparently”. She denied she had done anything inappropriate.