In a lively Prime Minister's Question Time, the issue of "cash-for-favours" was raised again by the leader of the Opposition, William Hague.

After a week dominated by the question of the head of Formula One, Bernie Ecclestone's £1m donation to the Labour Party, the issue of party funding was addressed by Tony Blair.

The Prime Minister told the Commons that he wanted to see the standards watchdog's investigation into party donations go back to 1992.

Mr Blair said: "I am perfectly prepared for myself to have it go back 10 years," adding that Liberal Democrats had agreed with his proposals and he hoped Tories would do the same.

Tory Leader William Hague then challenged the Prime Minister on the row over the Formula One chief's donation to the Labour Party:

"Has not your conduct been a shabby tale of evasion which voters in future, when asked to trust you, will not likely forget?"

But Mr Blair hit back: "No one knows where a penny of Tory money comes from. Before you get up and criticise the Labour Party ... get up and tell us now where the money comes from, who gave it ... and ... go back through the five years we are prepared to do."

The Prime Minister, pressed by Mr Hague on when Mr Ecclestone's £1m would be given back, replied: "We have said we will give this money back. We have already made arrangements to do so and it will be done in the next few days.

Mr Hague declared: "I would have thought that this week of all weeks, even this Prime Minister would not be on his high horse in this Chamber today."

The Tory leader said he would make his recommendations to the public standards watchdog, Sir Patrick Neill, and not prejudge his conclusions on party funding.

Mr Blair said that it was not a question of waiting for Sir Patrick's conclusions but a matter of the terms of reference of the inquiry.

Flourishing the document, Mr Hague said: "Well I've got the letter here. It does say, as you say, `the position we've adopted thus far has been to refuse this donation'.

"Then it says: `but we wish to be advised whether this is a position that we need to maintain'. It also says `we should consult you on whether it may be properly accepted'. Are we to understand that the next time you tell us you have ruled something out, you will take advice two days later on whether to do it after all."

"Does this explain why Mr Mandelson said on Saturday that the Government had behaved with complete propriety but has gone on today to say that it has been behaving out of character?"

Mr Blair said: "What you have just read out is precisely the answer I gave you a moment or two ago."

"In June, the Leader of the Opposition promised that he would publish a full list of donors. You have not, as far as I am aware, published a single name. In August the Conservative Party said they would publish their accounts. They have not so far published their accounts at all. They said they would give the money back from Asil Nadir. They have so far not given it back at all."
 

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