New Delhi, May 13: The Congress-led government today announced an inquiry into the sale of two Centaur hotels in Mumbai during National Democratic Alliance rule.

The nature and scope of the probe will be decided later. The decision follows demands by the Left and other allies as well as the Congress parliamentary party for investigation of the questions raised in a report by the comptroller and auditor general.

Finance minister P. Chidambaram said: “After examining the report of the CAG in respect of sale of two hotels, the government has decided to order an inquiry.”

Sources said either the Central Vigilance Commission or the CBI would be asked to perform the task.

A defiant former disinvestment minister Arun Shourie, under whom the sale of the government stake in the hotels was conducted, said he was “willing to face any investigation... there is nothing to hide nor is there any wrongdoing”.

The Left was jubilant. Dipankar Mukherjee, a CPM member of Parliament, said: “It is a partial success; we wanted a probe by CBI.”

Gurudas Dasgupta of the CPI added: “We want all the divestment transactions to be probed ? Balco, Jessop.”

Under attack for decisions taken during its rule, the BJP-led Opposition alliance harbours exactly such a fear. BJP sources said the development was “particularly damaging” because it dented the image of Shourie, the party’s Mr Clean.

Sources said a probe was not favoured either by the Prime Minister’s Office or the finance ministry, though the CAG report had enough fodder.

The Congress leadership and the Left insisted on an investigation as they felt it would vindicate the stand they had taken on divestment before and during the last election.

The CAG report had examined the sales of Airport Centaur to the Batras, who had links with the RSS, and of Centaur, Juhu, to a company floated by Ajit Kerkar, the former Taj group head who was a director in Air India, which owned the properties through its hotel subsidiary.

Kerkar’s company, Tulip Hospitality Services Ltd, which bought the Juhu hotel for Rs 153 crore despite failing to pay instalments in time, had a paid-up capital of only Rs 2,000. Tulip was the sole bidder.

The CAG report pointed out that in the case of Airport Centaur, too, there was a single bidder in Batra Hospitality which bought the hotel for Rs 83 crore only to resell it for about Rs 30 crore more to Sahara after only a month.