Page last updated at 17:12 GMT, Wednesday, 5 December 2007

Donor 'unlikely to get cash back'

David Abrahams
Mr Abrahams' money is likely to go to the government, sources say

The businessman at the centre of the row over hidden donations to the Labour Party is unlikely to get any of his money back, the BBC has learned.

Sources at the Electoral Commission have indicated that the £663,975 given by David Abrahams via associates will instead go into government reserves.

Labour officials have been holding talks with the commission over how the money should be re-paid.

Prime Minister Gordon Brown has promised to return the donations.

30-day limit

There was uncertainty as to whether the money should go to Mr Abrahams, a property developer, or the four intermediaries he used to donate to Labour over a period of four years.

Rich donors are nothing but trouble for the parties. That is demonstrably true
David Heath, Lib Dems

But Electoral Commission sources now say the money is likely to be forfeited by Mr Abrahams and paid into government reserves.

In the House of Lords, Justice minister Lord Hunt said: "My understanding is that the Labour Party is continuing discussions with the Electoral Commission as to how to return the money."

He added: "The government has repeatedly made clear that it strongly supports the work of the commission to enhance its role as an effective regulator."

Under electoral law donations have to be given back to the donor within 30 days - after which the money is paid into the Treasury's Consolidated Fund.

Commission sources said the Conservative Party had been forced to forfeit £25,000 it had wrongly accepted in July this year from Gareth Lake.

'Sorry tale'

They added that the Liberal Democrats had had to do the same with £40,000 they received from Christopher Nicholson in March this year.

In a Commons debate on Tuesday, Justice Secretary Jack Straw said he did not know whether the money donated by Mr Abrahams had yet left Labour's accounts.

BBC political editor Nick Robinson
Let's remember that this is currently a case of 'cash for what?'
BBC political editor Nick Robinson

Mr Brown has pledged to pay back the money which he said had not been "lawfully declared".

By law, anyone donating more than £5,000 must be identified and their details disclosed.

The prime minister has promised to move "quickly" to reform the rules governing party funding.

For the Tories, shadow Cabinet Office minister Francis Maude has described Labour's donor row as a "sorry tale of lawbreaking at the highest levels by one of Britain's biggest parties".

Liberal Democrat justice spokesman David Heath said: "Rich donors are nothing but trouble for the parties. That is demonstrably true."

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