Brown admits donations 'unlawful'

Mr Brown said the money was not lawfully declared

Gordon Brown has said donations to the Labour Party by a property developer through middlemen were "completely unacceptable" and would be repaid.

He told reporters he had had "no knowledge" of more than £600,000 of donations from David Abrahams, which could "not be justified".

"The money was not lawfully declared so it will be returned," he said.

Harriet Harman has also pledged to return £5,000 she received "in good faith" for her deputy leadership bid.

Labour's general secretary Peter Watt resigned on Monday after it emerged that Mr Abrahams donated the money to the party over four years, under three associates' names.

Advice on safeguards

It has emerged that a fourth donor was also used. Janet Dunn, the wife of one of Mr Abrahams' employees, donated £25,000 to the Labour Party in January 2003.

But, when questioned, she said she was a Conservative supporter and "knew nothing about it".

I had no knowledge until Saturday night, either of the donations or of the practice which had grown up Gordon Brown Harman defends donation Concern over secret donor

Another donation of £55,000 through solicitor John McCarthy has also come to light, bringing the total given via him to £257,125.

At his monthly press briefing Mr Brown said it appeared to have been a practice which had been going on "for some years" - but he was first told about it on Saturday evening.

Once the facts were established, Mr Watt's resignation was "a necessary first step" but the party would also return the money.

Inquiry ordered

Mr Brown said he had appointed the retired judge Lord McCluskey and the former Bishop of Oxford, Lord Harries, to advise on the changes that needed to be made in relation to donations.

Meanwhile Labour veteran Lord Whitty will draw up a report on what had happened.

DONORS Ray Ruddick - £196,850 Janet Kidd - £185,000 since 2003 John McCarthy - £257,125 since 2004 Janet Dunn - £25,000 Source: Electoral Commission Analysis: Fighting fires Q&A: Donations row

Mr Brown said a donation from Janet Kidd had been offered to his own leadership campaign, but had been rejected as only donations from people known to the campaign had been accepted.

Asked if he knew Mr Abrahams, Mr Brown said: "I am sure I may have met him but I have no recollection of any conversations about any of these issues.

"I had no knowledge until Saturday night, either of the donations or of the practice which had grown up where they were improperly declared to the Electoral Commission. No knowledge at all."

'Mistakes made'

He said mistakes had been made and changes were needed to ensure Labour imposed "the highest standards in future".

The Electoral Commission is investigating whether the donations breached the Political Parties and Referendums Act 2000 and has confirmed it has been "in touch" with the Crown Prosecution Service.

There is a time in the life of every government when it slips over from complacency into arrogance David Cameron Conservative leader Key figures react Business park plan probed

Under the law, those making donations on behalf of others must give details of who is providing the money.

Mr Abrahams donated the money through colleagues Janet Kidd and Ray Ruddick, and solicitor John McCarthy.

'Who gets money?'

UKIP leader Nigel Farage, who is still embroiled in a row with the Electoral Commission over forfeiting "impermissible donations" from a man who was not on the electoral roll, asked who the money would be paid back to.

He said: "Surely the money cannot be returned to Mr Abrahams because he is not the donor of record. Does that mean it all goes back to the jobbing builder, the secretary and the solicitor?"

It's a whole sleazy area; it needs cleaning up because of lack of public confidence Vince Cable Lib Dem acting leader Profile: Peter Watt Profile: David Abrahams

Mr Watt resigned on Monday after telling Labour's National Executive Committee he knew about the arrangement, but had believed he had complied with reporting obligations.

The Tories say this explanation "defies credibility". Conservative leader David Cameron accused the government of demonstrating "an indifference for the law" over issues like the donations and lost data discs.

He told business leaders at the CBI conference: "They say you've got to have this bit of security, that bit of compliance, and whether it's their own government departments or their own party machines, they simply don't obey the law.

"There is a time in the life of every government when it slips over from complacency into arrogance, and from arrogance into even indifference for the law. I say we've reached that point and it is time for real change in our country."

Deputy campaign

Money was also offered to Hilary Benn and Harriet Harman's deputy leadership campaigns, in Janet Kidd's name.

Ms Harman accepted it but Mr Benn's team turned it down because he was told it was on behalf of Mr Abrahams. He later accepted it when it was donated in Mr Abrahams' name.

Labour boss quits Labour to hold inquiry

Ms Harman said she had no reason to think the money came from Mr Abrahams and she had accepted Mrs Kidd as a "pre-existing Labour donor".

Mr Brown was repeatedly asked whether he had faith in Ms Harman - he referred to her statement that she had taken the money in good faith and gave her his support.

'Can of worms'

According to the Electoral Commission, Mr Ruddick has donated £196,850; Mrs Kidd has donated £185,000 since 2003; and Mr McCarthy £257,125 since 2004.

Mrs Dunn made the earliest known donation, £25,000 in January 2003.

Whatever the final calculations, the facts are simply gob-smacking BBC political editor Nick Robinson Read Nick's thoughts in full

Newspapers report that Mr Ruddick and Mrs Kidd are listed as directors of a property company, Durham Green Developments, which won planning permission for a multi-million pound business park - and Durham City Council had confirmed Mr Abrahams was involved in negotiations.

Acting Liberal Democrat leader Vince Cable said that "an enormous can of worms had been opened up" and the government should have brought in new party funding regulations.

"It's a whole sleazy area; it needs cleaning up because of lack of public confidence, " he said.

He added: "Harriet Harman has a lot of questions to answer ... the issue about why she accepted money that Hilary Benn and Gordon Brown had refused."

A ComRes survey suggests that Labour has suffered a six-point slump to 27% in a month, giving the Tories a large lead despite falling one point themselves to 40%.

It surveyed 1,002 adults by telephone on 23 to 25 November and the results were weighted.

WHO GAVE WHAT WHEN

UNDER GENERAL SECRETARY DAVID TRIESMAN
Janet Dunn	31 January 2003	£25,000
Janet Kidd	06 May 2003	£25,000
Ray Ruddick	18 August 2003	£25,000
UNDER GENERAL SECRETARY MATT CARTER
John McCarthy	12 January 2004	£15,000
Janet Kidd	01 April 2004	£10,000
Janet Kidd	27 October 2004	£2,000
John McCarthy	05 February 2005	£25,000
John McCarthy	01 June 2005	£25,000
UNDER GENERAL SECRETARY PETER WATT
John McCarthy	22 December 2005	£52,125
Janet Kidd	23 December 2005	£30,000
Ray Ruddick	23 December 2005	£17,850
John McCarthy	21 April 2006	£50,000
Ray Ruddick	24 May 2006	£50,000
John McCarthy	28 June 2007	£35,000
Janet Kidd	29 June 2007	£38,000
Ray Ruddick	29 June 2007	£24,000
Janet Kidd	10 July 2007	£80,000
Ray Ruddick	10 July 2007	£80,000
	Total	£608,975.00
Source: Electoral Commission