Lobbyist and new peers gave pre-election cash to Labour

Ian Greer, the lobbyist at the centre of the cash-for-questions scandal which engulfed the Tories, is named as a major donor to the Labour Party in a report for its annual conference later this month.

Five new Labour peers also gave large sums of money to Labour last year. A second lobbyist, Richard Faulkner, joint managing director of Westminster Communications, is also revealed as a leading financial donor. All gave more than pounds 5,000 to the party.

In July four big donors were elevated to the House of Lords. They were Ruth Rendell, the author, David Puttnam, the film producer, David Sainsbury, chairman and chief executive of J Sainsbury and Michael Montague, a businessman. The fifth, Swraj Paul, became a life peer in July last year.

Mr Greer, as head of Ian Greer Associates, was the go-between for payments to several Tory MPs, some of which were found to have breached Commons rules

According to the report from Labour's National Executive Committee the number of high-level donors more than trebled last year. In 1995, just 17 organisations gave more than pounds 5,000, compared with 55 in 1996.

The amount raised through party fundraising went up from pounds 4m in 1995 to pounds 10m in 1996, and a further pounds 6m was given in donations in the four month run-up to the election.

Peter Goldsmith QC, who recently became chairman of a City watchdog, the Financial Reporting Review Panel, also made a large donation. In the run-up to the election he was mentioned as a possible future solicitor- general.

A number of well-known party supporters from business and the arts were among the high-level donors, who were listed for the first time last year after a rule-change.

Among them were the publisher Paul Hamlyn, who gave pounds 600,000, the Chelsea football club vice-chairman Matthew Harding, who gave pounds 1m shortly before dying in a helicopter crash and the actor Jeremy Irons.

A number of trades unions gave money to Labour, including the General, Municipal and Boilermakers' union and the Transport and General Workers' Union, though the proportion of party funds given by the unions dropped below 50 per cent for the first time last year.

They gave 45 per cent, compared with 76 per cent in 1986. Two unions which gave more than pounds 5,000 in 1995 did not do so in 1986. They were the Amalgamated Electrical and Engineering Union and the Communication Workers Union.

Although the report does not give a final figure for Labour's general election campaign spending, it says it is expected to exceed pounds 13m. In 1992, the party spent pounds 10.4m and in 1987 it spent just pounds 4.2m.

The party's general election fund was pounds 1m overdrawn on 30 June this year but the deficit is expected to be cleared by the end of the year.

Asked about Labour's union funding in an interview with the BBC's Breakfast with Frost programme yesterday, the Prime Minister said party donors should not expect anything for their money.

"Nobody gives us any finances in return for anything," he said.

"Nobody, whether an individual or a company, gets anything other than a government whose ideas and principles they support."