The Prime Minister Tony Blair has promised an independant inquiry into party funding, after the opposition leader William Hague accused the Government of being in "turmoil and chaos" over Formula 1 motor racing boss, Bernie Ecclestone's £1 million donation to the Labour Party.

Sir Patrick Neill, the new chairman of the Committee on Standards in Public Life has until next summer to come up with new proposals.

The Government has been making it clear over the last few days that all aspects of party funding, even the possibility of cash from the state, will be considered by Sir Patrick.

Mr Blair gave a warm response to the Liberal Democrat leader Paddy Ashdown, and the Labour leftwinger Dennis Skinner, who called for a cap on each party's national spending at elections.

"All I want is a level playing field" said Mr Blair. "If that comes with restrictions on the level of money that can be spent in an election, I'm perfectly happy with that."

William Hague claimed Government was in chaos

Earlier, during Prime Minister's Question Time in the House of Commons, Mr Blair faced fierce questioning from the Conservative leader William Hague, who claimed the Labour leader was making up Government policy as he went along.

He said the tobacco sponsorship exemption for Formula One was another broken promise from the Government, following those on pensions, tax and cold weather payments.

"I am not accusing them of being paid to break their promises. They are breaking them for free all the time," he joked, much to the amusement of Tory backbenchers.

Mr Blair hit back, claiming the exemption for Formula One was in line with policy in France, Germany, Portugal and even Australia which, he said, had the toughest regulations in the world against tobacco advertising. "There was never any favour sought or given (by Mr Ecclestone) and the decision is the right decision taken for the right reasons." Mr Blair said.

Martin Bell, quick to hammer any sleaze suspicions

Martin Bell, the former BBC journalist, who won the Tatton seat at the general election on an anti 'sleaze' ticket, also attacked Mr Blair in Prime Minister's Questions. "Have we slain one dragon only to have another take its place with a red rose in its mouth?" he asked, to roars of approval from the Conservative benches.

Earlier, Mr Hague had asked Mr Blair whether he was prepared to meet leaders of Britain's other sporting bodies who are calling for the tobacco advertising exemption to be extended to other sports.

He also read excerpts of a letter from the World Professional Billiards and Snooker Association - whose president is Lord Archer, the former Tory party chairman - in which they claimed the same arguments given for Formula One's exemption could be used by several other sports, including snooker.

Mr Hague also quoted senior people in angling and cricket who said they were shocked a Labour government was seeking to "strangle the life out of working class sports".

Paddy Ashdown wants cap on spending

Liberal Democrat leader Paddy Ashdown welcomed plans to open the accounts of all political parties and went on to call for a cap on the amount parties could spend nationally at General Elections.

He said this would put an end to the "arms race" which forced Labour and the Tories to seek out more and more money from private individuals, businesses and trade unions, laying them open to inevitable accusations of influence-peddling.

Bernie Ecclestone...man in the middle

Later Mr Blair's officials released a detailed chronology of key dates between May 19 and November 4, leading up to the decision to exempt Formula One from the tobacco ban. They insist the list shows the meeting between Bernie Ecclestone and the Prime Minister was only a small factor in the long term decision making process.

Mr Blair handed back the money to Mr Ecclestone, the 67-year-old multi-millionaire head of the Formula One Constructors' Association, after claims it influenced the Government's decision to exclude the sport from the tobacco sponsorship ban.

Labour has denied the money was linked to the ban and Mr Ecclestone, a former donor to the Conservative Party, has said he expected nothing in return for the gift.
 
Bernie Ecclestone talks to BBC's The World Tonight about funding of political parties

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