Touche Ross denied reports that it had abandoned demands for the return of the donations. 'There is an exchange of correspondence,' said a source.
Pressure on the party to return the money is likely to be increased today by the Labour Party national executive committee, which is expected to offer the return of about pounds 11,000 the party received from Charilaos Costa, a Greek Cypriot businessmen who fled fraud charges two years ago.
However, a Conservative spokesman underlined Tory resistance. 'What they do with their donations is a matter for them.' He said the Touche Ross letter, received last Tuesday after a delay of 600 days, was in the hands of the party lawyers. 'We made a commitment if there was evidence the money was stolen, we will return it. That is still the position.'