BBC Political Correspondent Carolyn Quinn reports (3'20")

The Committee on Standards in Public Life has begun its first hearings into the way political parties are funded.

In his opening remarks, the chairman Lord Neill said the committee would be tackling some difficult issues, including the use of referendums.

The committee will hear evidence from politicians, businesspeople and political commentators.

A shadow has been cast over the start of the inquiry with uncertainty if the Formula One Chief, Bernie Ecclestone, will speak to the committee.

Mr Ecclestone has issued a statement denying a report in The Times newspaper which said he had decided not to give evidence.

"I am still considering whether to accept an invitation to give evidence to Lord Neill's Committee on Standards in Public Life," it said.

If Mr Ecclestone decides to appear, his evidence will be one of the highlights of the inquiry, which is expected to be complete by the summer.

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A spokesman for the Neill committee stressed that a space could be made for Mr Ecclestone to give evidence if he now wanted to do so.

"He had indicated to us verbally about a week or so ago that it was 'thanks, but no thanks'. But if he would like to come, we will find some time for him," the spokesman said.

Mr Ecclestone has been invited to appear to answer questions over whether he had expected anything in return for his £1m donation to the Labour Party before the general election.

His gift, one of the biggest single donations to a British political party, embarrassed the prime minister.

Tony Blair faced accusations last year that the donation had influenced the government's decision to exempt Formula One from a tobacco advertising ban.

The Labour Party later followed Lord Neill's advice and returned the money.

While evidence from Mr Ecclestone could embarrass Labour, former Tory party treasurer Lord McAlpine is expected to repeat some of the allegations he made after the time he defected to Sir James Goldsmith's Referendum Party in 1996 about the way the Conservatives raise funds.

The committee will hold hearings in London, Cardiff, Edinburgh and Belfast over the next three months.

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