Tony Blair declared on Monday night that David Blunkett had survived the row over his involvement with a bioscience company after the cabinet minister ordered his shares in the business to be sold.

After a tense day at Westminster, in which his political future again appeared to be in the balance, the work and pensions secretary announced he had asked his sons to sell shares in the technology company DNA Bioscience to head off “any potential future conflict of interest” over his role.

Mr Blunkett defended the position he had adopted until now, saying his involvement with the company had not created any conflict of interest. But after meeting the prime minister and Sir Gus O’Donnell, the cabinet secretary, Mr Blunkett sought to draw a line under the row by announcing his three elder sons would look to sell the stake in the unlisted company.

Mr Blunkett took up a position as a non-executive director of DNA Bioscience on April 19 this year, resigning two weeks later when he entered the cabinet. But for the past six months, Mr Blunkett’s family has continued to retain a 3 per cent stake, which he purchased last April for £15,000, placing it in a trust for his sons.

Mr Blunkett insisted on Monday night the company, which does DNA testing, did not have any contracts with his Whitehall department, nor with the Child Support Agency. He had made no representations on behalf of the company, nor provided it with any advice. But he added: “I am not prepared even to have the appearance that there could be any potential future conflict whilst the trust retains any shares in DNA Bioscience.”

He added: “I have, therefore, asked my sons to authorise the trustees to dispose of the shares. They have agreed to this. I have taken this step not only to avoid continuing misinterpretation of the position, but also to protect family and friends from further intrusion and hope that will be respected.”

Sir Alistair Graham, chairman of the Committee on Standards in Public Life, on Tuesday said Mr Blunkett had “undoubtedly” breached ministerial rules by failing to seek advice before taking up the DNA Bioscience directorship.

He was commenting on letters released on Monday night which revealed that the chairman of Whitehall’s independent advisory committee on business appointments, Lord Mayhew of Twysden, had written three times to Mr Blunkett reminding him of the rules on taking jobs after leaving the government.

The letters left no doubt that Mr Blunkett had broken the terms of the code of conduct for ministers when he joined the board of paternity testing firm DNA Bioscience in April, said Sir Alistair. But he said it was up to the prime minister to determine how the breach should be dealt with.

Sir Malcolm Rifkind, shadow work and pensions secretary, in an interview with BBC radio on Tuesday said that a breach of the ministerial code should not be considered “trivial“.

“I don’t think it is just a matter between David Blunkett and the Prime Minister. I think it is a matter between David Blunkett and parliament and the country as a whole.”

Chris Grayling, the shadow Commons leader, indicated that Mr Blunkett should resign. He argued that the decision to return the shares “suggests that he and the government recognise there is a case to answer”.

Mr Grayling on Tuesday wrote to the prime minister, demanding he make clear what action he was taking over the breach of the code, reminding Mr Blair that he had previously said he would expect all ministers to act ‘‘within the letter and the spirit of the code’’.

His letter was a challenge to a claim by a spokesman for Mr Blair on Monday that the row over Mr Blunkett was over. “The prime minister believes no further action is needed and the matter is closed,” said the spokesman.

Labour MPs argued that it would take another revelation over the issue to topple Mr Blunkett. However, many have been privately critical of the minister’s lack of judgment in taking up this directorship shortly before polling day, and continuing to hang on to his share stake for some time afterwards.

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