Labour's general secretary named

Mr Pitt-Watson, 51, has worked in the City since a two-year stint as Labour's assistant general secretary, responsible for finance, ended in 1999.

He is expected to step down as chairman of Hermes Equity Ownership Services. Hermes is a Northern Rock shareholder.

Mr Pitt-Watson, understood to have been Gordon Brown's favoured candidate, will replace Peter Watt, who quit in the row over Labour's donations by proxy.

Mr Pitt-Watson had argued publicly for the government to pursue a private sector solution to deal with Northern Rock, which has now been taken into public ownership.

'Robust structures'

The party's national executive chose him over Mike Griffiths, an official at the Unite union.

Mr Pitt-Watson said he was "thrilled" to have been appointed adding: "My first priority is to build on the progress already made to get the Labour Party ready to win a future general election.

"This is the wrong way to go about rebuilding public confidence"
Chris Grayling
Conservatives

"It is also to establish robust party structures and procedures in terms of finance and compliance to create stability for the organisation going forward."

Former general secretary Peter Watt resigned last November after admitting he knew businessman David Abrahams was donating money to Labour using other people's names.

The 37-year-old former nurse, who had been in the job since 2005, told Labour's ruling National Executive committee he was not aware he had broken the rules.

NEC chairman Dianne Hayter said Mr Pitt-Watson brought "a breadth of experience and will be a great asset to the party in terms of political judgment and organisational management".

But for the Tories, Chris Grayling said it would create "anxiety that Gordon Brown isn't serious about the party funding issue".

"Rather than appointing an independent figure, with no previous connection to political funding, he's appointed someone who's been involved in behind-the scenes-funding for Labour," he said.

"This is the wrong way to go about rebuilding public confidence."

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