The Ashcroft Affair: Move to end pounds 1m gifts to the Tories

MINISTERS ARE to consider changing the law to block Michael Ashcroft's pounds 1m per year donations to the Conservative Party, it emerged last night.

The plans were revealed as pressure mounted from Labour MPs to tighten up new rules designed to ban overseas gifts to political parties.

On Wednesday the Conservative treasurer was named in the House of Commons as having appeared on American Drug Enforcement Administration files in connection with inquiries into drug trafficking and money laundering. Mr Ashcroft has strongly denied the allegations.

There was also growing disquiet in Tory ranks last night. Conservative activists said they planned to table a motion at the party's annual conference in October, calling for the Tory treasurer to be elected by the membership rather than appointed by the leader. The move will be seen as a veiled attack on Mr Ashcroft, who is suing The Times newspaper for libel. Some Tories believe he should resign while he fights his legal action.

Labour MPs warned that plans to stop foreign donations, due to be published next week, would not go far enough. They would not prevent Mr Ashcroft from giving money to the Tories because he is still eligible to vote in Britain even though he lives in Florida and is the United Nations representative for Belize, where many of his financial interests are. Even though it is 12 years since he moved his main business to Bermuda and his home to Florida, Mr Ashcroft is still allowed to vote here because of a "20- year rule" brought in by the Conservatives, enabling expatriates to continue voting in UK elections.

Last night Chris Mullin MP, the Labour chairman of the Home Affairs Select Committee, said the time limit should be reduced to five years. It had been designed to boost the Tory vote in marginal seats and had in any case failed to work, he said.

Martin Linton, Labour member for Battersea, gave evidence to the recent inquiry on political funding by Lord Neill's Committee on Standards in Public Life. While the new rules will be based on a recommendation by Lord Neill, Mr Linton said the Government should go further and ban donations by people not liable for UK taxes.

Peter Bradley, the MP for The Wrekin who made the allegations in the Commons against Mr Ashcroft, said: "I would strongly suggest that Lord Neill never considered whether somebody who is a foreign country's UN ambassador and a tax exile living in Florida and working out of Belize could be a proper funder for a British political party."

Other Labour figures suggested one simple amendment to the Government's political funding Bill, due in draft form next week but expected to be in the Queen's Speech this Autumn, would suffice. Agents of foreign governments should be prevented from funding British political parties, they said.