The Conservative leader William Hague has promised to hand back any party donations found to be illegal.

Tory leader William Hague (0' 22")

Mr Hague has dismissed the fuss over claims that the party received £1m from a Hong Kong businessman Ma Sik-chun, who is alleged to have links to drugs gangs. He has refused to discuss the specifics of the case.

William Hague toured a London brewery as the controversy grew

"When I became leader of the party I made it absolutely clear we are not accepting any foreign money in future," said Mr Hague.

"I am very glad I made that announcement. That is absolutely what we are going to stick to," he continued.

Opponents are seeking to capitalise on the allegation that the Conservative Party received a £1m donation from Ma Sik-chun, who has been charged with drug trafficking.

Payment 'for return to Hong Kong'

The accusation was reported in the Hong Kong-based Oriental Daily News, which the Ma family owns.

According to the paper, the payment was made in June 1994 in an effort to smooth Ma's return to Hong Kong from Taiwan, where he has lived as a fugitive since 1978.

Labour has seized on the allegations. The Scottish Office Minister Brian Wilson, speaking on BBC Radio 4's World at One, said he was far from satisfied by Mr Hague's assurances.

"I don't think it's even a very good try," said Mr Wilson. "There's a lot of people who would like to draw lines under their dubious financial past. The legal system doesn't allow them to do that and I don't think the political system should either."

"The money should be given back," he continued. "If William Hague seriously believes he can get away with saying `Well look, this all happened an immensely long time ago' - three or four years ago - then I think he's deceiving himself."

The BBC's Nick Jones reports (0 46")

Labour's own funding has been a source of embarrassment recently when it emerged that the party received - and later returned - a £1m donation from motor racing boss Bernie Ecclestone.

The government later gave a temporary exemption to Formula 1 from a proposed tobacco advertising ban.

Dinner at Downing Street

The paper printed a picture of John Major meeting Ma Ching-kwan at Downing Street

The Hong Kong report said three months after the donation was made, Ma Ching-kwan, Mr Ma's son, was invited to dine with then Prime Minister John Major at Downing Street. The Oriental Daily News published a copy of the invitation and menu.

Ma Sik-chun fled to Taiwan after being charged in connection with one of Asia's largest drug-trafficking operations.

A year earlier, in 1977, his brother Ma Sik-yu - known in Hong Kong as "White Powder Ma" - took the same route after being tipped off that the police were about to arrest him on similar charges.

The Ma family denies both charges.

In the Oriental Daily News, the family said they had asked for the return of the money last April and they reproduced a numbered receipt from Tory Central Office in Westminster acknowledging receipt of the donation.

The allegation will stir memories of the embarrassment the Conservatives had to endure when it emerged that they had accepted a £440,000 donation from Asil Nadir, the fugitive Polly Peck tycoon.

Skinner calls for charity donation

In the House of Commons there was a general feeling that the money should be given back but Labour's Dennis Skinner said it would be unwise to return the cash to a suspected drug dealer.

The MP for Bolsover said that the work of people like Keith Hellawell, Britain's Anti-Drug Chief was made "10 times more difficult in terms of controlling drug abuse and trying to educate the young people in Britain when we now know - as I forecast three months ago in this House - that Ma Ching-kwan handed over £1m to the Tory Party."

Mr Skinner said: "He comes from a family of recognised heroin dealers in Hong Kong. They did it because they wanted the father who had escaped to Taiwan to be brought back to Hong Kong. They used the offices of David Mellor and of Chris Patten. They handed over the money in the presence of the last Prime Minister."

"Now that they have got the money, isn't there an additional argument that when people say `hand the money back', I'm not so sure it's the brightest of ideas because they would be handing the money back to a well-known drug dealer. It ought to go to charity."

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