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LONDON (Reuters) -- British Prime Minister Tony Blair gave his backing on Tuesday to a minister responsible for science policy after a newspaper revealed he had a financial interest in genetic engineering.

Lord (David) Sainsbury of Turville, former chairman of one of Britain's biggest supermarket chains, was reported by the Guardian to be the indirect owner of the patent rights of a gene which plays a key role in research into modified crops.

A spokesman for Blair told journalists Sainsbury would not resign from his job as junior minister at the Department of Trade and Industry, responsible for science policy.

But he appeared to acknowledge a potential clash of interests by confirming that Sainsbury regularly excluded himself when the cabinet's committee on biotechnology discussed genetically modified (GM) crops.

A spokeswoman for Sainsbury said the minister was "playing safe" by removing himself from discussion of GM issues.

Blair's office said Sainsbury had put his extensive interests into a blind trust, the normal procedure under the government code for ministers, when he joined the DTI last July. "The blind trust is crucial," the Downing Street spokesman said.

According to the Guardian, Lord Sainsbury's blind trust is the owner of Diatech Ltd., a London-based company which owns the patent to a gene known as the cauliflower mosaic virus promoter.

The gene is vital to plant modification because it acts as an "on/off" switch to boost the growth of GM crops such as soya.

The gene is at the center of Britain's latest flap over the safety of GM foods because it was used by scientist Arpad Pusztai, who claimed his research showed damage to rats fed on genetically modified potatoes.

Pusztai was retired from his job at a research institute in Scotland amid a row over his findings. Last week a panel of scientists spoke out in his support.

Blair has publicly supported GM foods as safe but newspaper headlines about "Frankenstein foods" have deepened public concern in Britain about safety in the food chain.

Copyright 1999 Reuters Limited. All rights reserved.