DONALD Dewar and his special advisers were at the centre of a political storm last night as Scottish Secretary John Reid vehemently denied newspaper cash-for-access allegations centred on his son's work as a lobbyist.

Relations between the two camps reached a new low against a background of accusations of smear campaigns and political ineptitude, in a row which overshadowed the start of the Labour Party conference at Bournemouth.

Mr Dewar yesterday called for an inquiry by the Scottish Parliament's standards committee into the allegations that lobbying and public relations firm Beattie Media had claimed to be able to arrange meetings with Scottish Executive Ministers and influence the diary of Scottish Finance Minister Jack McConnell, who once worked for the firm.

The Observer newspaper said Mr Kevin Reid had boasted to one of its reporters posing as a potential client: ''I know the Secretary of State very, very well because he's my father.''

It also quoted a Beattie Media director who said that Mr McConnell had been appointed ''in the certain knowledge that Jack would get a safe seat from the Labour Party and in the hope and expectation that he would also get a Cabinet position within the new administration''.

Beattie Media yesterday apologised for its naming of Ministers, but stressed that its executives repeatedly declared during talks with the bogus businessman that they would not, and could not, promise access to Ministers.

The SNP described the row as ''a serious problem for the Labour Party in Scotland, involving allegations of sleaze and cronyism'', and called for the claims to be ''investigated in full''.

Dr Reid issued a blistering attack on the Observer's claims that his son was ''now a key player in a New Labour lobbying firm peddling claims of influence and access to Ministers''.

But his public statement failed to quell the political fall-out behind the scenes as Dr Reid's close colleagues claimed he was the victim of a smear campaign, and others blamed Mr Dewar's office for fanning the newspaper's ''absolutely untrue allegations about Kevin Reid''.

Dr Reid's friends have suspected a smear campaign against the Scottish Secretary over the last couple of weeks but either they do not know or will not say whom they hold responsible. Dr Reid refused to be drawn on the suggestions of a smear campaign, insisting his ''only locus in the cash for access story was as the father of Kevin Reid''.

Last night a close parliamentary colleague said: ''Someone is at it and we think it is a disgrace. It is really unfair. It is even more unfair they will use a bogus story about Kevin Reid to get at his father. Someone desperately wants to stop John Reid being the Secretary of State for Defence. I just think the timing seems to be coincidental with the imminent reshuffle.''

Another of Dr Reid's colleagues played down the smear against the Scottish Secretary, instead suggesting the cash-for-access story was a smear against Mr McConnell.

Mr McConnell confined himself to comment on the apology from Beattie Media. He said: ''I am very pleased that I and my office have been vindicated. We operate to the highest standards and will continue to do so.''

Later, he and two other Holyrood Ministers named in the Observer story issued a joint statement, saying the claims were ''baseless and untrue''.

Mr Dewar's office defended its role in the row as simmering tensions between the Scottish Executive and the Scottish Office spilled into the open.

As the two camps exchanged insults in less than parliamentary language, Dr Reid's supporters claimed the way Mr Dewar called for an inquiry without an emphatic denial of any impropriety was ''yet another example of the ineptness of Donald and his advisers''. They accepted Mr Dewar's demand for an inquiry but questioned ''the spin'' which they claimed gave legs to an unfounded story.

David Whitton, Mr Dewar's beleaguered spin doctor, who encouraged the First Minister to call for an inquiry, dismissed any criticism. He maintained that any anonymous critics were not worthy of a response.

A senior Scottish Holyrood figure lambasted the warring Labour factions. ''It would help if we were all on the same side, we are after all meant to be wearing the same strips.''

As almost open warfare broke out, a Labour source blamed Trade Minister Helen Liddell for trying to manufacture splits between Paisley MP Douglas Alexander and Dr Reid. He said: ''They fought an excellent campaign in Hamilton South and if they hadn't been there, who knows what would have happened. Anyone who thinks otherwise is completely out of touch.''

While Dr Reid and Mrs Liddell have worked closely together in the past it is believed in Westminster that Mrs Liddell's friends are making a ''last gasp effort'' to improve her political fortunes.

PR firm apologises Page 3

Conference reports Pages 6 & 7 Leader comment Page 12