Row over Blair's pounds 79,000: Labour to introduce new rules after NEC gives leader 'a hard time' on campaign spending

LABOUR is introducing new rules to limit spending in its leadership contests following an internal row over the discovery that Tony Blair spent pounds 79,000 to become leader.

Mr Blair's substantial campaign fund - pounds 88,000 was raised by his campaign advisers, much of it from leading media personalities - contrasts sharply with the spending power of his rivals. Margaret Beckett spent only pounds 17,000 during the contest, while John Prescott, who became deputy leader, spent an estimated pounds 13,000.

These figures, published here for the first time, were supplied to Labour's election procedures committee. They provoked what was described as a 'very fraught meeting' of the party's National Executive Committee last Wednesday, at which Mr Blair was said to have been given 'a hard time'.

The NEC agreed in principle to set cash limits on spending in any future election, and detailed new regulations are being drafted.

News of the scale of Mr Blair's spending caused dismay in wider Labour circles. Ken Cameron, general secretary of the fire brigades union, said last night: 'I am alarmed at these figures and the disparity they show. People should be elected to office within the party on their record.'

Mr Blair's funds were collected by Barry Cox, former director of corporate affairs at London Weekend Television, who took time off work to help organise the Blair campaign.

He called a meeting at his home in Hackney, east London, where wealthy Labour supporters such as Melvyn Bragg, the broadcaster and novelist, and Ken Follett, the thriller writer, pledged donations. David Puttnam, the film producer, was contacted shortly afterwards and made a contribution.

Mr Blair benefited indirectly from the managers' windfall at LWT last year, when senior figures at the television station, including Mr Bragg, Mr Cox and Greg Dyke, the former chief executive and another contributor to the Blair campaign, became millionaires through share options.

Yesterday Mr Cox said that Mr Blair needed offices, staff and campaign literature and also had to tour the country. 'All these things cost money and, put it this way, it wasn't difficult to raise the money.'

Mr Blair's campaigners hired a suite of offices in Westminster, installed computers and recruited about a dozen staff for the duration of the leadership contest. About pounds 25,000 was spent on leaflets.

The contest was the first to be fought under the party's new one-member-one-vote system and candidates were required to canvass much more widely than in the past, but there were no rules about what they could spend or how they should account for the spending afterwards. Mr Blair none the less submitted a 'very professional' set of accounts to the election procedures committee.

Its reaction was that it was wrong for any one candidate to enjoy such a huge advantage over his rivals.

When the NEC discussed an expenditure ceiling last week, the sum of pounds 25,000 was indicated 'as an illustrative figure'. Under planned new rules to be brought forward next month, there would also be a limit of pounds 5,000 on individual donations, and any donor who gave more than pounds 2,000 would have to be identified in an internal party audit.

Right-wingers in the party, however, believe that such limits are unenforceable and the plans are almost certain to be challenged. 'How can this work?' asked one yesterday. 'How can you prevent someone from putting out a leaflet on someone else's behalf? It would be impossible to police and it's probably wrong to try.'

At least as contentious is a proposal from the procedures committee that fund-raising and spending to gain election to the NEC should be banned. Jack Straw, the party's local government spokesman, who managed Mr Blair's campaign, created a stir recently with an appeal for funds to win a seat in the NEC elections this week.

Labour's election procedures committee comprises Gordon Colling, the print union leader who is chairman of the Labour Party for the forthcoming year, Colm O'Kane of the health services section of Unison, Frank Wilkinson of the general union GMB and Clare Short, MP.

Mr Blair was yesterday trying to mollify his party's restless left wing, promising an offensive against the 'undeserving rich', giving a commitment to a minimum wage and stating that full employment was an attainable objective.

(Photographs omitted)

Raising the cash, page 3

Alan Watkins, page 21

Where did he come from? page 23