The York-based Joseph Rowntree Foundation was today considering legal action after a Sunday newspaper linked it to a story about Deputy Prime Minister John Prescott.

Both the Foundation and a second Rowntree organisation, the Joseph Rowntree Reform Trust, have condemned the article in yesterday's Sunday Times.

The story alleged Mr Prescott failed to declare a £27,750 donation from the Joseph Rowntree Reform Trust in 1996, which Mr Prescott has denied.

But the Reform Trust, and the charitable Joseph Rowntree Foundation are angry over claims in the article that the two organisations are linked.

Communications director for JRF, David Darton, said: "We have no relationship with the Reform Trust at all. We are a charity and the Foundation is not and never has been engaged in party- political lobbying.

"The Sunday Times article is extremely misleading in its implication that the Foundation is able to influence donations to politicians through the quite separate, non-charitable Reform Trust."

He said the only link between the two organisations was they were both set up by Joseph Rowntree in 1904.

The Foundation's work involved funding research on poverty-related issues and it also managed the village of New Earswick and other housing. Dr Tony Flower, consultant at the Reform Trust, said: "We're very angry as well. This is not a story."

But David Leppard, editor of the Sunday Times' Insight team, said: "The Foundation, in its own publicity material sent to the Sunday Times last week, describes the Reform Trust as its sister organisation. They are therefore related."

Mr Darton said: "Everybody accepts there are historical links and the term 'sister' relates to those historical links. But the issue is not whether we are described as sister organisations, it is whether we have any links in substantive terms."

Alastair Brett, company solicitor for Times Newspapers, said: "I have not had anything in writing from the Foundation so I'm unable to comment at the moment."

Meanwhile, Tories were today demanding a Commons statement from Mr Prescott over the political donation. He has denied doing anything wrong over the donation.

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