Political funding fraught with danger

Bettino Craxi: Former Italian PM was subject of criminal investigations

Coming soon after Labour announced a clutch of multi-million pound donors, Stuart Wheeler's £5m pledge to the Tories has renewed the debate on how we fund our political parties.

But other EU countries have endured funding scandals that have cracked the political establishment, as the BBC's Ireland Correspondent Kevin Connolly and David Willey in Rome report.

Nowhere has the relationship between money, politics and power created such public agony in recent years as it has in Ireland.

Three tribunals have explored different aspects of corruption and graft in the country's political establishment in the 1970s and 1980s.

There have been areas of specific concern, like the subversion of the planning system with illegal payments.

However, it is the story of the former prime minister Charles Haughey as it has emerged from the hearings which has come to symbolise the relationship between money and politics in that period.

It is the fallout from that era which led to the imprisonment for contempt of court this week of Liam Lawlor, now an independent member of the Irish parliament but once a close party ally of Mr Haughey.

Charles Haughey: Once spent £16,000 of public money on shirts in Paris

He was jailed for resisting the tribunals' attempts to explore his financial dealings.

Mr Haughey, it has emerged, not only once spent £16,000 of public money on shirts from a Parisian outfitters but appears to have received gifts from wealthy associates totalling more than £8m.

His supporters argue that is not necessarily corruption because no specific favours were granted in return.

In that atmosphere, the government published proposals last month which maintain the official policy of strict limits on election spending and political contributions.

No individual or organisation will be able to donate more than £20,000 to a party or £5,000 to any given politician in any one year and that money will have to be lodged in a special account.

In a three-seat constituency, each candidate's spending will be limited to £20,000.

So the rules are strict and the limits low but perhaps the most powerful check on the behaviour of Ireland's politicians in the future will be the behaviour of its politicians in the past.

Italy struggles with 'slush funds'

In the early nineties, scandals surrounding the illegal funding of political parties destroyed the two parties which had governed Italy uninterruptedly since the end of World War II - the Christian Democrats and the Socialists.

A series of high-profile criminal investigations against leading politicians - including Prime Minister Bettino Craxi - revealed that laws regulating the funding of parties had been constantly abused by practically all the main parties - including the Communists who, it was revealed, had for decades been receiving secret subsidies from the former Soviet Union.

Silvio Berlusconi: Conflict of interest

It was no secret either that for many years after the war, the US paid millions of dollars to the ruling Christian Democrats in order to help them keep the Communists out of government.

In 1999 the Italian parliament voted on a new law financing general and local election expenses.

A subsidy equivalent to US$2 for every voter on the register is now divided up between all the political parties, who receive at least 1% of the total vote at the last general election.

This means that millions of dollars flow into the coffers of the leading political parties at election time.

But this does not mean that secret slush funds provided by big business and confidential contributions to political parties by private individuals are a thing of the past.

Italian politicians continue to demonstrate greed - particularly at election time.

And the problem of how to deal with the conflict of interest involving the media magnate Silvio Berlusconi standing for Prime Minister at the April general election has not been resolved.

He still remains the majority shareholder in Italy's leading commercial television network despite his political role as opposition leader.