The prospect of cross-party agreement over changing the rules on political party funding looks increasingly distant amid a row over union funding.
Sir Hayden Phillips has chaired the political funding talks
Shadow cabinet office minister Francis Maude said the Conservatives wanted a "genuine" £50,000 cap on donations, which would cover trade union funding.
But Labour says union funding should be treated as a series of small donations from individual members.
Mr Maude said Labour had broken pledges to bring in "fundamental reform".
'Big donor culture'
He told BBC Radio 4's Today programme that Tony Blair had said the review of political party funding would include union funding of the Labour Party.
But, he said, Gordon Brown had "gone back" on that and a "polite fiction" had been put together to allow £8m of union funding of Labour to continue.
At the weekend Conservative Party leader David Cameron threatened to pull out of the talks if there was not a cap on union donations.
He said the current plans were a "sham" which would give parties £90m of taxpayers' money to clear debts while still not ending the "big donor culture".
But Labour accused Mr Cameron of having a "cynical approach" and seeking "to deliberately sabotage the process".
The review of political funding was launched in the midst of the furore over cash-for-honours and the revelation that parties received large undisclosed loans in the run up to the 2005 election.
The aim was to find agreement on funding rules to increase public faith in politics - with many believing that a cap on individual donations would end any perception that individuals or organisations could "buy" influence.
Other differences between the sides were also highlighted by Labour Chief Whip Geoff Hoon who suggested at the weekend he wanted to find a way to cut Conservative donor Lord Ashcroft's funding of Tory candidates in marginal seats.
He told GMTV's Sunday Programme: "I am worried about the way in which one man, in this case Lord Ashcroft, appears to be dominating one political party in order to influence the outcome of elections in particular parliamentary constituencies."
Another major scandal?
On Monday's Today programme Mr Maude rejected Mr Hoon's attack, saying Lord Ashcroft's money went into a fund which was administered by the party centrally.
Mr Maude also said it was helping to level the playing field after recent changes which meant sitting MPs were "spending ever increasing amounts of taxpayers' money to promote themselves".
Campaign group Unlock Democracy director Peter Facey said: "If party leaders believe they can pull out of this process and emerge with any sympathy, they are mistaken.
"If we miss this opportunity we are all but guaranteed another major scandal in the next five years and parties at a local level will continue to decline."
The man chairing the review, Sir Hayden Phillips, said in July that he was hopeful agreement was possible and that the parties had agreed the talks "would conclude in mid-October".