Business Secretary Kwasi Kwarteng decided to dismiss Aquind's plans to provide a new electricity link between Portsmouth and Normandy in France.

The proposal was controversial as a company director, Alexander Temerko, has previously donated more than £1m to the Conservative party.

Giving the green light to the project could have reignited the sleaze row that has enveloped the government.

The claims have related to MPs' lobbying, second jobs and the prime minister's own financial affairs.

A letter published on the Planning Inspectorate website showed Mr Kwarteng had decided to "refuse development consent" having considered his obligations under the energy National Policy Statement.