Conservative donor Lord Fink has backed away from threats to sue Labour leader Ed Miliband over allegations of tax avoidance, as he admitted he did take "vanilla" measures to reduce his liabilities.
Miliband yesterday intervened in the row over alleged tax avoidance linked to HSBC's Swiss subsidiary by naming Lord Fink in the Commons as a holder of an account at the Geneva branch and accusing David Cameron of being "a dodgy Prime Minister surrounded by dodgy donors".
The former Tory treasurer branded Miliband's jibe "untrue and defamatory" and challenged him to step out from the cover of parliamentary privilege so he could take legal action - something Labour sources said Miliband would do as he launches the party's education policy in a speech in north London later today.
But in an interview with the Evening Standard, Lord Fink acknowledged that if Miliband accused him of "ordinary tax avoidance" he would be unable to sue.
The hedge fund multimillionaire said: "I don't even want to sue Ed Miliband. In my life I have been libelled a few dozen times and I have never sued anybody, even for some comments that were quite outrageous.
"If he simply uses the words 'Lord Fink did ordinary tax avoidance' then no, I couldn't sue him. But if he made the statement 'dodgy' about my bank account, that was potentially libellous. That was the issue I took exception to.
"I also took exception to him saying I had questions to answer. In fact, whenever anyone has put questions to me I have answered them."
Lord Fink told the Standard: "The expression tax avoidance is so wide that everyone does tax avoidance at some level."
He said he had rejected expert advice that he could save a fortune by adopting "aggressive" avoidance measures, but added: "I chose the mildest end of the spectrum that I was advised on. What I did ... was at the vanilla, bland, end of the spectrum."
Lord Fink said he "used the opportunity ... to set up some simple family trusts" while on a four-year posting to Switzerland.
"Really what I was trying to do was, not like a living will, but to allocate a very small shareholding to each of my children so they could pay deposits on houses in London one day after we returned," he said. "There was nothing complex, and they weren't aggressive tax planning.
"My family and I paid tax on all the dividends, both in Switzerland and the UK. They were done because my children were under 18 and I wanted them to have something to help them make their way in the wider world."
Lord Fink was among nine Conservative donors listed as clients of HSBC's Swiss subsidiary in leaked files, according to The Guardian. The newspaper said the accounts were held legally for a wide variety of reasons, and made no allegation of wrongdoing against those listed.
Of more than 6,000 British names understood to have been passed to HM Revenue & Customs in 2010, UK tax authorities say they have pursued around 1,100, recovering £135 million in unpaid tax, fines and interest. Just one prosecution has been brought and around 130 cases remain outstanding.
During a rowdy Prime Minister's Questions session, Miliband branded Cameron a "dodgy Prime Minister surrounded by dodgy donors" who was "up to his neck" in the HSBC tax avoidance scandal.
But Cameron hit back by pointing out a former Labour donor featured on the list of account-holders. The Prime Minister also insisted that "every proper process was followed" when former HSBC chief Lord Green was appointed trade minister at the end of 2010.