A question of morals

All smiles over funding?

By Nick Assinder BBC News Online political correspondent

Picture a meeting between Tony Blair and Clare Short as he tries to explain to her why it was a good idea to accept a large donation from a soft porn publisher.

The air at this, unfortunately fictitious, meeting would risk turning as blue as some of Mr Desmond's famous top shelf titles.

The prime minister would, undoubtedly, express the view that, as long as parties are reliant on donations for funding, it is difficult to reject those from individuals involved in perfectly legal enterprises.

Guest at Downing Street

He might also point out that such donations were always done "blind" so he would not necessarily know who had given.

It is unlikely Ms Short, who once attempted to have page three pictures banned, would have been delighted by his arguments although, to be fair to her, she has yet to make any public comments about it.

Cash for favours

But what is absolutely clear is that a large number of Labour backbenchers are deeply disturbed by the fact that the publisher of Asian Babes, amongst other magazines, is not only a donor to their party but has been a welcome visitor to Downing Street.

Indeed, it was alleged that it was at a Downing Street dinner with the prime minister in February that Mr Desmond learned of new plans to crack down on young offenders.

Blunkett not amused

The story became the "exclusive" lead in the Daily Express the following day, to the great chagrin of Home Secretary David Blunkett who was set to announce the move in a Commons statement that afternoon.

Mr Blunkett displayed his irritation that his thunder had been stolen when he told the Today programme: "Yes, I read the number 10 briefing in the Daily Express."

It has also been revealed that it was at a party laid on by Mr Desmond that the prime minister's spin doctor Alastair Campbell allegedly introduced Ulrika to Sven.

However, the suggestion that Mr Desmond's donation was part of a "cash for favours" scheme which saw him being given the all clear to take over the Daily Express does not appear to hold water.

Cosy relationship

That does not, of course, remove the suspicion in some minds that anyone handing over large sums of cash to any political party expects it will do them some good somewhere down the line.

But the row over the Desmond cash has, much to Downing Street's annoyance, shifted.

It started as a row over possible "cash for favours" but has turned into a debate over the morality of party funding and the prime minister's apparently cosy relationship with Mr Desmond.

The line from the Labour Party appears to be that, if someone who is involved in legitimate business wants to give money then there is no reason to refuse to accept it.

That has led to questions over exactly where a line may be drawn - arms dealers and tobacco producers have been mentioned.

Groundhog day

Clearly this is a difficult and sensitive issue and, as Downing Street regularly points out, it is only because this government has opened up the books on funding that such donations are even known about.

Whenever one of these stories emerge - the Hinduja brothers, Mittal or smallpox vaccines - the prime minister's official spokesman declares with exasperation: "It's Groundhog day again." And it's easy to sympathise with him.

However, the allegations all raise serious and legitimate questions over the nature of party funding.

And each time another one emerges, the demands for state funding grow louder.

That solution to the predicament of funding must now be a serious runner.