Gordon Brown stepped up the pressure on George Osborne by demanding a formal probe into claims he solicited an illegal £50,000 donation from a Russian oligarch.
The Prime Minister waded into the row by insisting the allegations were "a very serious matter indeed", adding: "I hope that it is investigated by the authorities."
The intervention came after the bitter spat between the shadow chancellor and his accuser Nathaniel Rothschild escalated further, with the banking heir producing a witness to back up his claims.
Mr Rothschild - a friend of Mr Osborne's from Oxford - is understood to be furious the Tories have challenged the truth of his account of conversations that took place over the summer at his Corfu villa and nearby on the luxury yacht of billionaire Oleg Deripaska.
For his part, Mr Osborne has flatly denied either he or Conservative party fundraiser Andrew Feldman raised the prospect of a donation from Mr Deripaska at the social gatherings.
Former Labour minister Denis MacShane issued a list of questions for Mr Osborne to answer, including whether Mr Deripaska or the Tories had finally decided it would not be appropriate to "channel" a donation through one of the oligarch's British companies, Leyland Daf.
Mr MacShane warned he was ready to take the matter to the Electoral Commission or Parliamentary Standards Commissioner, John Lyon unless there were satisfactory replies.
But the Tories accused him and Mr Brown of making a "desperate attempt" to keep the story in the headlines. They also insisted that the person who should provide more information was new Business Secretary Lord Mandelson - who was present at many of the Corfu social events with Mr Osborne.
"All the questions raised in Denis MacShane's letter are dealt with in yesterday's statement from George Osborne and Andrew Feldman," a spokesman said.
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"The person who hasn't answered any questions is Peter Mandelson, who should immediately set out a detailed account of his numerous dealings with Mr Deripaska."
