MPs give all-clear to party's 'blind' fund

Labour's fund to raise money from anonymous donors has been given the all-clear by an-all party committee of MPs who decided not to investigate it. The "blind" fund was set up in 1995 to raise money for Tony Blair's office in such a way that the identity of donors was not known to anyone in the party apart from the board of trustees, chaired by Lord Merlyn- Rees, a former home secretary.

Last year David Shaw, Tory MP for Dover, wrote to Sir Gordon Downey, the Parliamentary Commissioner for Standards, suggesting it was "inconceivable that a donor would not seek to draw the receiving MP's attention to his donation at some time".

But the Labour Party had taken the precaution of checking with Sir Gordon whether the fund breached parliamentary rules, and he felt he had to refer the complaint to the Standards and Privileges Committee, the guardian of parliamentary propriety.

Now it has effectively rejected the complaint by deciding that it would only consider the allegation that Mr Blair knew about the identity of donors to the fund and has asked Mr Shaw to provide evidence on that point, which is likely to prove impossible.

Mr Shaw had attempted to get the whole issue of the fund considered by the committee and had wanted the MPs to seek information from Mr Blair.

The committee's effective rejection of the complaint will be a relief for Labour, which will now be free to campaign on the issue of party funding and in particular raise questions about how the Tories' parlous financial position was turned round so quickly in the past year that they are now reported to have a pounds 40m war chest.

A spokesman for Mr Blair's office said: "We sought advance clearance and we are seeking to have the whole issue of party funding referred to the Nolan Committee [on standards in public life], something the Tories have blocked because they have so much to hide."