Publication of the submission from Paul Flynn to the Neill inquiry into party funding comes just a day after The Independent revealed how Labour is seeking sponsorship through lobbying firms. The party is maintaining links with staff who now work as
lobbyists and has asked them to raise money from their clients.
Mr Flynn, MP Newport West, has told Sir Patrick Neill that his party's own suggestions on future political funding do not mention sponsorship at all. This could allow companies to avoid the new regulations, he said, and to give money without consulting their shareholders.
Although Labour declares all donations and sponsorship over pounds 5,000, Mr Flynn said the limit could be difficult to police where payments were made in kind.
He urged the Neill Committee to look closely at the issue of sponsorship. Labour was planning to raise hundreds of thousands of pounds in that way this year, and the Tories had been known to use the same methods.
He gave Sir Patrick a list of recent Labour sponsorship deals, including funding for a Welfare to Work breakfast by British Aerospace, funding for a new MPs' induction conference by the drug company Novartis and funding for a Welfare Reform roadshowby NTL Cabletel.
A Labour spokesman said its submission to the committee did not mention sponsorship because "it was not an attempt to draw up a new law. If somebody sponsors an event in the Labour Party and if that sponsorship amounts to more than pounds 5,000, that is open and declared. The suggestion that there is some sort of secret dealing is wrong."