In the news: Paul Drayson

The founder of one of the most successful university spinoff companies who donated £100,000 to the Labour Party and found himself at the centre of a row over a government contract has been appointed to the House of Lords.

Paul Drayson will take his seat alongside 22 other newly appointed Labour peers in the list of 46 new appointees to the Lords published this week.

Three years ago, Dr Drayson's company PowderJect Pharmaceuticals was awarded a £32 million government contract to supply smallpox vaccine.

The decision to award the contract was made after Dr Drayson had made two donations of £50,000 to the Labour Party.

Investigations by the National Audit Office and the Commons public accounts committee concluded that there had been no impropriety in the way the contract had been awarded.

Dr Drayson's company capitalised on research into needle-free injection technology at Oxford University in the early 1990s.

Although PowderJect later turned its attention to the production of vaccines, Dr Drayson's original £250,000 investment in the company earned him £43 million as part of a £542 million takeover deal last year by the US pharmaceutical business Chiron.

The sale of his stake in the company saw Dr Drayson ranked tenth in The Sunday Times ' list of the highest paid people in Britain in 2003.

When Dr Drayson's peerage was announced last weekend, he said that he intended to play an active role in entrepreneurship and science debates. He told the BBC: "I'm really looking forward to this. I've spent 20 years working in business as a science entrepreneur and I have a real interest in innovation."

In other interviews, Dr Drayson said that he had been "very impressed" with the quality of debate in the Lords, particularly on issues such as stem-cell research.

He stressed that his peerage had nothing to do with his party political donations. He said: "People should remember that I have also given £4.5 million to charity, so my Labour donation is put in perspective."