Ever since Tony Blair went shoulder to shoulder with George W Bush, critics have wondered what Britain is receiving in return for his support. Where, they asked, was the special relationship? Hitherto statesmen have not given unconditional support to a foreign power in one field without asking for concessions in another. Bush has had the quid; could someone please show us Blair's quo pro?

There has been no public reference to the Prime Minister lobbying Bush to endorse the admirable side of new Labour's foreign policy as the price for military co-operation. He has criticised the US in speeches, but if hard diplomatic pressure has been applied in negotiations on Afghanistan or Iraq to force Bush to sign up to, say, the International Criminal Court or Kyoto, no spinner has whispered the news to hacks.

On one difference between Washington and London, however, the government has been proud to boast that Blair has called in favours. The PM has been pulling every string in his hands to ensure that British companies are exempted from US laws to protect pensioners and employees from the enormous frauds of the bubble economy. The FTSE 100 has fallen by 20 per cent this year and rumours of another Enron or WorldCom continue to depress the market. Retirement policies and endowment mortgages have fallen as far or further. A Labour government is nevertheless fiercely opposing the modest protections against corporate crime which were ratified by a Republican president. The Prime Minister has been scampering to conservatism for so many years that nothing he does can shock many of his former supporters. But despite everything we've been through, I want to argue that the sight of Blair arguing against Bush from the right is still one to make the most jaundiced eyes bulge.

Government "sources" told the Observer that Blair had picked up the hotline phone and asked Bush "to exempt British companies and their auditors from tough new US laws designed to crack down on corporate fraud". The laws were enshrined in this summer's Sarbanes-Oxley Act from the US Congress. Lord Sainsbury of Turville, a junior minister at the Department of Trade and Industry (DTI), explained: "We do not want to see extra regulatory burdens piled on to British companies."

The Prime Minister and Lord Sainsbury have not been lone voices, the Financial Times reported. DTI sources told the paper there had been "weeks of lobbying by ministers, diplomats and officials". Sir Christopher Meyer, our ambassador to Washington, had, we learned, made it his business to pester US senators with arguments for giving benefit of the clergy to British companies listed on Wall Street.

For 20 years, the US was the loudest and most intimidating voice in favour of deregulation. It assured the world that prosperity came from leaving markets to themselves. Successive British governments have trailed along behind. Then suddenly, this summer, the line changed and new Labour found itself well to the right of Congress and the president, who were falling over themselves in the charge to regulate the corporations that bankrolled them.

Whitehall's baffled consternation is pardonable because no one predicted the careering U-turn. When Enron collapsed, Americans learned that 186 members of the House of Representatives and 71 of the 100 senators had received its pelf. Democrats and leftish American magazines have made half-hearted attempts to pretend that Enron was a Republican scandal. It won't wash. Clinton begged Enron for money and used US power to force India and Mozambique to let the brutal corporation in to its markets. (Clinton may also have persuaded new Labour to let Enron buy Wessex Water in 1998 and to abandon its defence of the coal industry, although, as Enron was sponsoring a gala reception at that year's Labour Party conference, its executives were well placed to do the persuading themselves.)

Meanwhile, American conservatives and assorted Panglosses have maintained that the failure of Bush to bail out Enron proves that the corporation hadn't bought the US political system cut-price. Again, not so. Bush deregulated the energy markets in the Enron interest and his vice-president, Dick Cheney, opposed price caps on electricity at Enron's behest. Enron's debts were simply too large for Bush to save the company, and, in any case, the victims of the bankruptcy were the pension funds of ordinary Americans rather than banks with political muscle.

The "big five" accounting conglomerates had also become Washington "players". When Arthur Levitt, who was in charge of the Securities and Exchange Commission from 1993-2001, tried to end the egregious conflict of interest which allows accountancy firms to sell additional services to the companies they are auditing, he was defeated by a lobby of senators who had received campaign donations from the cartel. The defeated Levitt allowed the Big Five to retain the incentive to keep quiet about fraud for fear of jeopardising lucrative consultancies. His successor, Harvey Pitt, came from a law firm that had represented Arthur Andersen, Enron's and WorldCom's corrupt accountants, and the rest of the Big Five. He denounced state regulation - and then was forced to absent himself from virtually every SEC investigation into the wave of corporate fraud because of conflicts of interest.

Fear, not a change of heart, has driven the US political class to act against its paymasters and astonish its British followers. Millions of Americans have what are known as 401(k) pensions invested in the stock market, and they have seen the value of their savings reduced or, in the case of Enron employees, wiped out. The losers are also voters. The Sarbanes-Oxley Act was inspired by the terror of losing office.

Although radical by modern standards, the new act is scarcely a measure to compare with Franklin D Roosevelt's reforms after the 1929 crash. Company directors face prison and fines if they are found to have committed fraud, while chief executive officers and chief financial officers will be made personally liable for signing off false accounts. There is no honest argument against either sanction. Auditors, meanwhile, will be banned from selling some, but not all, additional services to clients. Following the revelation that Wall Street banks were boosting dotcom shares they knew to be junk, there will be protection for whistle-blowers. Statutory regulations for accountancy will be strengthened. And that's about it.

Investors in British pension funds are facing the same assault on their expectations as their luckless American counterparts. So why is tough new Labour being so soft on corporate crime?

A few of its objections are not wholly discreditable. Rod Armitage, head of company affairs at the Confederation of British Industry, makes a convincing case that, in the panic to prove to small investors that it was really on their side, the US elite rushed through a muddled bill. But the real opposition comes from the accountancy industry, and its objections are ludicrous.

The Big Five - or Big Four, as we must now call them, after the dissolution of the Andersen partnership - constitute one of the most powerful vested interests in the land. Together with independent partnerships, they have given Britain more accountants than there are in the rest of the EU put together. The present government has been an obliging servant. The cartel persuaded new Labour to drop a commitment to impose statutory regulation of accountancy, which might have protected the Maxwell pensioners of the future. Everything was cosy until the Sarbanes-Oxley Act threatened regulation by the back door.

Half the corporations listed on the FTSE 100 are also listed in New York. They now face statutory regulation by the SEC, whose investigators will probably demand the right to inspect the work of their London-based auditors. But if 50 British corporations can cope with statutory regulation in New York, why can't their competitors back home carry the same Sainsbury "burden"? Why, in other words, should standards be lower here than there?

Peter Wyman, president of the Institute of Chartered Accountants, is alert to the danger that the public may get the point and demand protection from his members. He has persuaded ministers to accept that everything they once believed about globalisation was wrong. Despite repeated assertions to the contrary, we apparently do not live in a globalised business world, Wyman is maintaining. British accountants are far better chaps than their bent American colleagues. Robert Maxwell and BCCI were scandals as great as Enron and WorldCom, but Wyman and Patricia Hewitt, the trade and industry secretary, claim that accountancy has reformed itself in the decade since they broke, and allowed the inherent goodness of the Surrey stockbroker belt to flourish.

Hundreds of thousands of investors who have had their hopes and savings slashed because they trusted Equitable Life are about to have this comforting sentiment tested in the courts. Equitable's new management has issued a £2.6bn damages claim for professional negligence against the former auditor, Ernst & Young. The auditors are fighting the action, and we'll have to wait on the judiciary. All outsiders can do at the moment is note that Ernst & Young picked up £1m in audit fees and £7.5m for consultancy work for Equitable during 1999 and 2000. This is pushing it a bit, even by Enron standards. Before they both disappeared in disgrace, Andersen's consultancy work for Enron was worth about twice the price of its audit fees.

Perhaps sensing that he could not justify the claim that staff employed by Andersen in the City are wholly superior to staff working for the same partnership in Houston, Wyman has tried another argument. In a piece in the Times last month, he wrote without self-knowledge or apparent embarrassment that: "injury has been added to insult. It is not that directors of multinationals based in the UK knowingly sign false accounts or otherwise condone wrongdoing in their companies, but that, inevitably, they rely very significantly on professional advice. To be put at risk of imprisonment in a foreign country if something goes wrong in this process is more than directors bargain for when they take office."

Ignore for a moment that the vast salaries and share options directors looted from companies in the bubble were justified by claims that these were supermen who deserved every penny they took for coping with great risks and responsibilities, and consider what Wyman is admitting. Innocent directors could be imprisoned because of the errors or frauds of auditors. These are the same saintly auditors that he represents and regulates. I have yet to read a more convincing argument for state intervention.

But the British state remains content to leave its citizens without an independent watchdog and to burn up what diplomatic capital it has in Washington in defence of Wyman's worthless cause. It is a sad comment on Britain's decline that all Blair's lobbying failed. The SEC refused to exempt British firms.

Wyman gave a warning to the Yanks last month about the dangers of ignoring the PM: "It may well be that the London market, over time, takes additional overseas listings that might otherwise have gone to the US."

Yet not one British company, from BP to Vodafone, has delisted from the US market. British-based corporations were never going to cut themselves off from American capital. In the end, they will comply with statutory regulation of their audits by the SEC. Failure to do so will make investors muse about what they have to hide and provoke bad cases of Enronitis.

The SEC and Congress have called new Labour's bluff, and, as in so much else since 11 September, the "special relationship" has proved to be a one-way process in which America receives but does not give. Thank God for that. Sarbanes-Oxley is American imperialism at its best.