David Cameron faced demands today for an independent inquiry into explosive claims that access to the Prime Minister could be secured by making large donations to the Conservative Party.
The Prime Minister was plunged into a damaging row over party funding after Tory treasurer Peter Cruddas urged reporters posing as wealth fund executives to give more than £250,000 in return for direct face time with senior ministers.
Mr Cruddas resigned within hours of his claims being exposed by The Sunday Times and denied that party donors could in fact improperly influence ministers.
Mr Cameron insisted that was “not the way” the Conservative Party raised money and promised an internal inquiry to ensure it would not happen again.
But Labour called for a full independent inquiry into the “incredibly serious” allegations of cash for access.
Danny Alexander, the Prime Minister's Liberal Democrat Cabinet colleague, described the claims as “utterly disgraceful”.
The row led to renewed calls for reform of party funding. Sleaze watchdog Sir Christopher Kelly warned that the incident could not be seen as “an isolated event” and urged the parties to come through on their commitments to the “big donor culture”.
Mr Cruddas, who became the Tories' principal treasurer only at the beginning of March, was secretly filmed claiming that “things will open up” for anybody willing to donate £250,000 a year.
Speaking to undercover reporters who were posing as wealth fund executives, he claimed: “It will be awesome for your business.”
He said that “premier league” donors - those giving £250,000 a year - could lobby Mr Cameron directly and their views were “fed in” to the Downing Street policy unit. He said there was no point in “scratching around” with donations of £10,000.
According to The Sunday Times, he believed that any prospective donations from the reporters would come from Liechtenstein and would be ineligible under election law.
They are said to have discussed the creation of a British subsidiary and the possibility of using UK employees to make the donation.
Major donors are invited to private dinners and other events with Mr Cameron, Chancellor George Osborne and Foreign Secretary William Hague, he said.
Mr Cameron said today: “What happened is completely unacceptable. This is not the way that we raise money in the Conservative Party, it shouldn't have happened.
“It's quite right that Peter Cruddas has resigned. I will make sure there is a proper party inquiry to make sure this can't happen again.”
Former foreign secretary David Miliband described the disclosures as “grotesque” and said they showed the Tories had not changed.
“The revelations today go to the heart of the Tory Party claim that you can trust the Tory Party because they have got rid of their bad old ways - from what we know they haven't,” he said.
Shadow minister Michael Dugher wrote to the Prime Minister demanding that he disclose which Tory donors had visited Downing Street, Chequers or Dorneywood since May 2010 and what policy representations they had made, particularly on the top rate of income tax that was cut in Wednesday's Budget.
“Today you said that you would ensure there was 'a proper party inquiry' into these matters,” he wrote to Mr Cameron.
“However, given the seriousness of the allegations about how Government is conducted, it is not appropriate for the Conservative Party to investigate itself. We need a full, independent inquiry.”
Sir Christopher, chairman of the independent Committee on Standards in Public Life, said politicians should not be allowed to “duck” the issue of party funding any longer.
“It would be wrong to regard this as an isolated event. Events like it are inevitable as long as the main political parties are dependent for their existence on large donations from rich individuals or, in the case of the Labour Party, a small number of trade unions.
“The parties collectively need urgently to address the damage this does to confidence in the integrity of the political process.”
Asked about funding reform, Mr Cameron was non-committal, stressing that he had already addressed issues within the Conservative Party.
“We've reformed party funding. I took over a party with £20 million of debt. It's now virtually debt-free,” he said.
“We've massively broadened our supporter base. We have very strict rules, very strict compliance, and I'm going to make sure that the rules are properly complied with in every case.”
But Mr Alexander, the Chief Secretary to the Treasury and second most powerful Lib Dem in the Government, said the three main parties would be making a renewed effort on funding reform within the next few weeks.
“What I would say is this makes the case for reforming the system of party funding in this country even stronger.
“No political party has been without its problems in relation to party funding. Over the next few weeks the three parties will be getting round the table following on from an initiative by Nick Clegg, the Deputy Prime Minister, to discuss how we can change the way party funding works to try and get the big money out of politics.”
In a statement released in the early hours of this morning, Mr Cruddas said he regretted “any impression of impropriety arising from my bluster”.
“Clearly there is no question of donors being able to influence policy or gain undue access to politicians,” he said.
“Specifically, it was categorically not the case that I could offer, or that David Cameron would consider, any access as a result of a donation.
“Similarly, I have never knowingly even met anyone from the Number 10 policy unit.”
Conservative Party deputy chairman Michael Fallon told Sky News that Mr Cruddas had been “blustering and boasting and that was clearly wrong”.
The Tory MP added: “Let me be very clear about this - we rely on lots of individual donations, but you can't buy favours with those donations and you certainly can't dictate policy with those donations.”
The Labour leader insisted the allegations could not be "swept under the carpet" and said an independent investigation must establish "what influence was sought, what influence was gained, and what impact it had".
"The Prime Minister came into office promising that he would be transparent, and he would ensure that the right systems would be put in place around Conservative Party funding," he said.
"Now we discover very disturbing revelations about the way that access was sought, the way that access was bought or apparently at least offered, and that's why we need a proper investigation into what happened.
"It can't be an internal Conservative investigation sweeping it under the carpet and in a way keeping it from the public. We need to know what happened.
"These are so serious these allegations because it's about the way that policy is made, we've just had a Budget in which the tax rate has been cut at the top of the income scale.
"We need to know what access was paid for, if access was paid for, and what contributions were made and the interaction between the Prime Minister, the Chancellor and Conservative Party donors."