David Spector, a former strategic adviser to Sharon's Likud party, accused the premier of attempts to illegally finance his 1999 campaign for the Likud leadership.

"Arik was involved in everything and dealt with everything in great detail," he told Israel's Channel 2 station on Monday, using Sharon's nickname. "If I wanted revenge, Sharon would not be prime minister today."

The television station also played a tape recorded in September 2000, in which the voices of Spector and Sharon are heard discussing the transfer of money to Sharon's headquarters.

Resignation call

In reaction, Labour MP Ofer Pines called on army radio for Sharon to resign immediately.

"This is proof that Sharon is up to his ears in the Cyril Kern affair," he said. "The prime minister bought his rule with money and now it is clear that the version he told the state investigator was a lie and doesn't hold water."

The scandal centres around a $1.5 million loan from South African businessman Cyril Kern that was allegedly used by Sharon to return irregular contributions to his campaign for the Likud leadership.

"Arik (Ariel Sharon) was involved in everything and dealt with everything in great detail. If I wanted revenge, Sharon would not be prime minister today"

David Spector, 
Former Likud party offical
 

Sharon was grilled by police for seven hours at the end of October over the Kern affair.

Videotape 

Spector's name was first connected to the scandal last week when Channel 2 broadcast a secretly-recorded videotape.

The tape showed him meeting in September 2000 with Sharon's son, Omri, and the former Likud director Uri Shani.

The three were sitting together listening to a proposal by Shani to use party funds to finance Sharon's election campaign.

"I can issue Likud cheques today which no one can trace," Uri Shani said. The tape shows Omri listening without replying.

Investigation

The conversation appeared to directly contradict testimony given by both Omri Sharon and Shani to the state prosecutor who is investigating the alleged corruption.

Members of the Sharon family have been questioned several times by Israeli police and the national fraud squad over alleged irregular contributions to the 1999 campaign.

Omri, who is a Likud deputy, was questioned by police in October.