The Commons Standards and Privileges Committee, whose last report resulted in the resignation of the Paymaster General, David Willetts, is to examine the funding of the Opposition leader's office and in particular the fund set up two years ago as a vehicle for anonymous donations to the party.
The investigation will embarrass Labour, which has sought to make the secretive nature of Tory funding an issue. The embarrassment could be compounded should Mr Blair, like Mr Willetts, face questioning by the committee in the glare of television cameras.
The investigation follows a complaint by the Tory MP for Dover, David Shaw, following revelations last year of the existence of the blind fund. Sir Gordon Downey, Parliamentary Commissioner for Standards, has given provisional approval to the concept of the blind fund. Because of this he has told members of the Committee he cannot undertake an investigation into the fund himself.
The idea was to allow donors to Labour privately to give large sums. But many in the party believe it was an "own goal", as the party argues it is more open about its sources of funding than the Tories.
In his complaint Mr Shaw said the notion of such a blind fund is a sham, as "it is inconceivable that a donor would not seek to draw the receiving MPs' attention to his donation at some time".
The Standards and Privileges Committee will also examine the role of former Tory whip Andrew Mitchell in the investigation into the Neil Hamilton cash-for-questions affair. It has decided to call Mr Mitchell to give evidence next Monday.
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