The Labour Party this evening denied PN claims that it had links with Bateman, the Israeli company which was one of the bidders for the power station extension contract.

The PL in a two-line statement described as 'lies' claims made earlier by the PN.

In its statement, the Nationalist Party had called on Labour leader Joseph Muscat to explain the 'good links' which the Israeli ambassador had said existed between the Labour Party and Bateman.

The comment by the Israeli ambassador was made during a meeting with Prime Minister Lawrence Gonzi and was revealed in the Public Accounts Committee yesterday by Infrastructure Minister Austin Gatt.

The PN said it was very worrying for all those who believed in transparency that the PL leader 'had contacts' with Bateman while the company was bidding and putting political pressure to win the contract.

The ambassador had described Dr Muscat's contacts as 'good' and even said that it was Dr Muscat himself who raised the issue during a meeting, the PN said.

It had also resulted, the PN said, that Bateman had insider information, which it should have never held.

It also used former Israeli PM Ehud Olmert to try to pressure the Maltese government.

The PN said that Dr Muscat should explain what links he had with Bateman, why he never revealed them, how many meetings had been held between the PL and Bateman, what interests Dr Muscat had in these contacts and what he was hiding.

The Auditor and the EU had shown that the authorities had done nothing wrong in this issue, the PN said. Now it was Dr Muscat's time to explain.

The Labour Party while denying the claims said that should the PN want more, it just needed to wait a bit, the PL said.