David Cameron has demanded to know who knew about Labour's proxy donations, saying it is "incredible" that top Labour officials did not know the law.
It "beggars belief" that Gordon Brown knew nothing about the donations, he added, and said the PM was trying to "spin his way out" of the row.
But Labour's chief whip Geoff Hoon said Mr Brown had been "completely shocked" and "really upset" by the revelations.
The Sunday Times claims up to 10 Labour officials knew about the donations.
It says details of the claims, strongly denied by the Labour Party, are to be passed to the Metropolitan Police who are investigating donations of more than £650,000 to Labour, made by property developer David Abrahams using other people's names.
By law, anyone donating more than £5,000 must be identified and relevant details about them disclosed.
Labour's general secretary Peter Watt resigned after admitting he knew about the arrangement but thought it was legal.
And Jon Mendelsohn, Labour's chief fundraiser, has said he recently found out about it and was trying to end it, but did not tell the party's leadership or its National Executive Committee.
But the Sunday Times reports that up to 10 Labour officials may have known about the donations, which Mr Brown has said were "not lawfully declared".
David Cameron told BBC One's AM Show it was "frankly incredible" that Mr Mendelsohn and Mr Watt did not know Mr Abrahams' donations were breaking the law, and added: "I think what we've got to work out and find out is who knew about this in the Labour Party and who was told about this."
Asked whether he thought Mr Brown was being "dishonest" about what had happened, he said: "He's trying to spin his way out of a scandal... this lot are worse when it comes to spin than Tony Blair's government."
He added: "Are we really meant to believe that Mr Mendelsohn didn't know what the law was, didn't tell anyone about it, that Brown knew nothing? It beggars belief."
Mr Brown, who has said he had "no knowledge" of donations by Mr Abrahams, said on Saturday a reform of political funding was needed to rebuild confidence in the political system. He has also pledged to pay the money back, saying the donations were "completely unacceptable".
Chief Whip Mr Hoon later told the BBC's Politics Show: "Anybody who knows Gordon Brown knows that he has been completely shocked by these revelations.
"He has a real reputation around Parliament ... as someone frankly not that interested in matters of money, certainly so far as it affects him personally and as far as it effects the party."
Meanwhile Communities Secretary Hazel Blears told the BBC's Andrew Marr Show the row was having a "corrosive effect" on politics and made it "very difficult" for people who shared a party's values to donate money.
She said: "I think we do need a long term settlement for political funding in this country otherwise, you know, politics costs money, and this kind of thing is going to happen again and again."
Mr Abrahams has said he did not know his donations broke any rules
She said it was time to look "very seriously indeed" at a cap on donations, but she said individual trade union affiliates should still be allowed to continue to donate their "literally pennies" to the Labour Party.
BBC political correspondent Norman Smith said Ms Blears was not backing an overall £50,000 cap on union donations.
She was in favour of the unions as a corporate body only being able to give £50,000, but members continuing to be allowed to pay into a political levy - which could be worth about £1m.
Mr Cameron said he would be happy to look at a £50,000 cap on donations, but only if trade unions' contributions were not made exempt.
But he said funding reform was "nothing to do with" the donations row, which he said boiled down to top Labour officials professing ignorance of "basic bits of the law".
Acting Lib Dem leader Vincent Cable added that while Labour had tried to reform funding by setting up a new law "they then tried to find ways round it".
He said the row had become a "sleazy affair", adding: "Who are the people that knew about these donations and why didn't they do anything? Were those in the know ministers or party officials?
"It is now up to the police to decide whether these donations were part of a conspiracy or an administrative failure."