In quotes: Donation row reaction

Key figures give their reaction to the revelation that the Labour Party was given more than £600,000 by a property developer via intermediaries.

GORDON BROWN, PRIME MINISTER

What has happened, where political donations have not been lawfully declared, is completely unacceptable, cannot be justified in any way, and this behaviour should never happen again in future.... The money was not lawfully declared so it will be returned.

DAVID CAMERON, CONSERVATIVE LEADER

There is a time in the life of every government when they've been in power for so long that complacency tips over into arrogance, and arrogance even becomes indifference to the law. They've passed that point and change, real change, is needed now in Britain.

VINCE CABLE, ACTING LIBERAL DEMOCRAT LEADER

In the Queen's Speech there was no reference whatever to promised legislation on party funding, which is the problem. It's a whole sleazy area. It needs cleaning up because of lack of public confidence. There was no promise to do anything about it.

DAVID ABRAHAMS, LABOUR DONOR

[Labour general secretary Peter Watt] didn't deserve to resign. He was an excellent and very efficient general secretary. If he wasn't aware of the law he should have been given another chance. The party should review his resignation. It's not the way forward for the Labour Party.

TONY WRIGHT, PUBLIC ADMINISTRATION COMMITTEE CHAIRMAN

It's a complete mess and it's getting more complicated by the minute. We've just got to focus on the core fact that someone tried to disguise the fact that they were [donating]... Someone in the Labour Party went along with this deception.

CHRIS GRAYLING, SHADOW WORK AND PENSIONS SECRETARY

There is a growing sense that we are part of a Shakespearean tragedy here. Blow after blowing is falling, they are not in themselves related but they have a cumulative effect. The net effect is an atmosphere of inevitable and impending doom.

SIR ALISTAIR GRAHAM, FORMER CHAIRMAN OF COMMITTEE FOR STANDARDS IN PUBLIC LIFE

Nobody can say they don't know what the arrangements are for ensuring there is full public transparency of where donations or loans to political parties come from. If somebody fails to abide by those rules, it's unfortunate somebody has to lose their job, but I'm sure that's the appropriate thing to do in the circumstances

DENIS MACSHANE, LABOUR MP

Clearly we have a problem with party financing in this country - we don't know if Lord Ashcroft, the Tory finance chief, lives here, or is domiciled here for tax purposes. Peter Watt - who's a very straight, honest party servant - has resigned and we're going to have to face up to the question - how do we finance democratic politics in this country. Nobody's come up with an answer yet

DAVID LAMMY, SKILLS MINISTER

He [Mr Watt] is someone who's made a huge contribution to the Labour party; in particular he's steered the party through that transition from Tony Blair to Gordon Brown. But having said that, this is of course difficult news for the party. There is an investigation going on looking into how this money has been paid over, through intermediaries in this way. And Peter has obviously decided that in those circumstances he should step down.

MARTIN BELL, FORMER INDEPENDENT MP

It is clearly against the spirit of the law and, I would say, the letter of the law, to give money to parties through intermediaries and common sense says that the Labour Party should have checked this out a long time ago.

ANGUS MACNEIL, SCOTTISH NATIONAL PARTY MP

It's absolutely unbelievable that after a year and a half's investigation by the Metropolitan Police we have death by a thousand cuts over the last few days for the Labour Party. The scandal seems to be deepening and widening.

LORD CUNNINGHAM, FORMER CABINET MINISTER

I think there's just no excuse for people - particularly officers of the Labour Party - now knowing what is required under the law at present, and Gordon Brown has acted absolutely correctly in my view and decisively. And it simply is a disgrace that it's happened and gone on for so long.

MATTHEW TAYLOR, FORMER ADVISOR TO TONY BLAIR

Every time there is a scandal, an allegation of a scandal, there's brow-beating, enquiries set up, but actually this is going to carry on until we much more fundamentally change the way in which political parties are funded. What happens is that, if you're a political party in the firing line, if you're unpopular then party funding will come and grab you.