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Did 'Foundation X' try to buy Britain?

Truth is stranger than fiction, it's said - but if there's any substance behind claims made in the House of Lords earlier on Monday by Lord James of Blackheath, then the murky world of politics and high finance just took a turn for the truly bizarre.

The Tory peer, most famous as the architect of Michael Howard's 2005 cost-cutting election agenda, told the Lords about a series of secret communications he'd had with an organisation he referred to only as 'Foundation X', which he said was willing to invest billions in gold bullion to cure Britain's economic woes.

In a speech now posted on YouTube, Lord James went on to provide details of the increasingly unbelievable offer.

"There will be no interest charged," he revealed. "And, by the way, if the British Government would like it as well, if it will help, it will be prepared to put up money for funding hospitals, schools, the building of Crossrail immediately with £17 billion transfer by Christmas, if requested."

Lord James reported that a Government minister had indeed met with the mysterious Foundation, but had backed away from a deal when analysts told them that the amount of bullion the Foundation claimed to be holding to back up its currency reserves was "more than the entire value of bullion that had ever been mined in the history of the world".

Foundation X's overly generous offer wasn't the only eyebrow-raiser in Lord James's speech. Peers tittered as they were treated to claims that the former banker had helped launder billions in terrorist funds for the IRA and "North African terrorists".

"It's no use getting the police in for me," said Lord James, "because I shall immediately call the Bank of England as my defence witness, as they put me in to deal with these problems."

Speculation has been voiced since that "Foundation X" could either be a front for the Vatican, or a group known as the Office of International Treasury Control, which claims to be affiliated to the UN and is known to have attempted hoaxes in Ecuador and Fiji.

The organisation also allegedly bid $5 billion for troubled British car maker MG Rover, but its bid is said to have been dismissed after it submitted a deposit of £1 by postal order.

It was clear peers didn't know quite what to make of His Lordship's antics. Opposition spokesman Lord Myners, summed up the general air of puzzlement:

"Clearly, the noble Lord has access to the solution that, with one leap, will take all the Government's problems of financing to a better place. The Minister has clearly been remarkably bad at responding to the noble Lord, and we look forward to the Minister's explanation now."

A full transcript of Lord James's speech is available in the official parliamentary journal, Hansard.