Tricky times for Mike and Dave

The future of the profitable relationship between the Conservative party and the multi-millionaire Tory peer Michael Ashcroft (pictured), who has been bank-rolling the party to the tune of hundreds of thousands of pounds in recent years, is looking uncertain this week - unless Lord Ashcroft comes clean about whether or not he pays tax in the UK or avoids it by being domiciled in the tax haven of Belize.

The stand-off between the party and its great benefactor has arisen because Lord Strathclyde, Conservative leader in the Lords, has said the Tories will support a bill proposed by the Lib Dems' Lord Oakeshott which would oust from the Lords any peers who are resident abroad for tax purposes.

Ashcroft, who has also loaned more than £3m to the Tory party and provides free flights on his private jet for party leader David Cameron and other senior Tories, makes no secret of the fact that his domicile is registered in the tax-haven of Belize. But he is very secretive about whether or not he pays tax in Britain.

To make matters even more awkward for Cameron, it is suggested in some circles that Ashcroft does pay tax here and simply wants to keep his affairs private.

Typically, when Ashcroft's spokesman was asked about the Oakeshott bill, he said he understood it would require peers to be resident in the UK for tax purposes and that it would have "no effect" on Ashcroft. But he refused to say whether that meant the peer paid tax in Britain.

Michael White, the Guardian's political commentator, wrote on Monday that at a recent lunch with Ashcroft - for which the peer paid in cash - he got the impression Ashcroft might be "having a joke on us" and would prove to tax-resident in Britain after all. White says that when he asked Ashcroft about his tax status, he responded: "I refuse to discuss certain aspects [of his affairs, including his family] ... You can ask about my sex and gender. You can ask whether I have two testicles and a penis. But [on tax] I do not respond."

Oakeshott's bill is expected to be published soon after this week's parliamentary recess. "My bill will be very carefully drafted to leave no wriggle room for peers trying to dodge paying taxes on the same basis as their 60 million fellow-citizens," Oakeshott, a Lib Dem Treasury spokesman, said on Monday. "If you are in the British parliament you must pay full British taxes."