Lord Mandelson
The former business secretary wants the government to establish an independent commission (Getty)

Lord Mandelson has called for a public inquiry into the 1986 Guinness share-trading scandal, arguing that Jewish businessmen were made the scapegoats of a cover-up.

Ernest Saunders, Gerald Ronson, Sir Jack Lyons and Anthony Parnes were found guilty in 1990 of conspiring to drive up the price of shares in Guinness during a takeover battle for drinks firm Distillers in the 1980s.

The men, after a 112 day-long-trial, were convicted of all but one of the charges they faced.

Now the former Labour business secretary, writing in the forward of a new book by Iranian Jewish businessman Lord Alliance, has backed a call for a public inquiry into the incident.

"The plot to push up Guinness shares in the closing days of the bid for Distillers was orchestrated by leading City figures who were allowed to go free, showing once again how the British establishment can protect its own," Mandelson alleged in the book.

Lord Alliance, the author of autobiography A Bazaar Life, claimed he was approached to join the share ramping by the city figures and declined.

The 82-year-old claimed he initially planned to spend £2.5m ($3.8m, 3.3m) on Guinness shares, but pulled out.

He argued that there was an anti-Semitic plot to scapegoat the Jewish businessmen because a Tory minister warned him the authorities were "going to go after the Jews".

"The systematic cover-up of the role played by some of the City's most 'respectable' stockbrokers and merchant bankers, who were happy to take the profits when times were good and let Jews go to jail for them when they had turned sour," the peer said.

Lord Alliance wants the government to establish an independent commission to "impartially" investigate the affair.