Ashcroft accepts peerage (and that he must reside in Britain)

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Michael Ashcroft, the Conservative party's treasurer and biggest donor, won his battle to be elevated to the House of Lords after last-minute negotiations with the body which vets new peers.

The Political Honours Scrutiny Committee, which rejected William Hague's nomination of Mr Ashcroft last year, approved his peerage after the controversial Florida-based businessman promised move back to Britain and to give up his position as the UN ambassador for Belize.

In an unprecedented move, Mr Ashcroft will not be allowed to take his seat in the Lords until he lives permanently in Britain. Downing Street said he had given "a clear and unequivocal assurance" to do so by the end of this year.

Labour MPs claimed Mr Hague had been forced into the humiliating position of pleading with the vetting committee on behalf of the man who is bankrolling his party: "This shows there is nothing Mr Hague would not do for him," said one Labour backbencher. "People will be asking how close this gets to cash for peerages."

Mr Hague shocked Downing Street by nominating Mr Ashcroft again this year. Ministers believe the three-strong committee said "no" again and that a persistent Mr Hague sought to negotiate with it. However, the Tories claim the committee merely sought "clarification" over where Mr Ashcroft would live and his role for Belize.

Mr Ashcroft has previously claimed that snobbery among the establishment had stopped him receiving the peerage traditionally granted to the Tory treasurer.

"As a businessman, as a campaigner against crime and drugs and as a political party fund-raiser there are a number of subjects in which I have both great interest and some experience."