Peter Hain is to admit that he failed to declare tens of thousands of pounds given to his campaign for Labour's deputy leadership.
The Work and Pensions Secretary's admission, which could be made today, may leave him fighting for his political life. There is speculation at Westminster that he may have failed to register donations totalling as much as £100,000 – on top of the £82,000 he has disclosed from 11 backers.
Mr Hain came fifth in a field of six in last year's contest. The winner, Harriet Harman, registered donations totalling £46,000 while Alan Johnson, the runner-up, disclosed £54,000.
Mr Hain intends to come out fighting when he publishes his full return to the Electoral Commission watchdog. He will accept full responsibility for the late disclosures and admit that his campaign should have been run more efficiently. But he will insist there is no reason for him to resign because all the donations were above board.
Allies of Mr Hain say he has been an unlucky casualty of the controversy over secret donations of £600,000 to Labour by David Abrahams, the property developer, which are now the subject of a Scotland Yard investigation.
Although Gordon Brown has admitted the law was broken when Mr Abrahams gave money through frontmen, Mr Hain's allies insist there is no suggestion that any of the minister's donations were inadmissable.
The unfinished business over his campaign finances has made it harder for Mr Brown to "move on" from one of the issues which put a cloud over his government during the final three months of 2007. Two advisers who ran his campaign have clashed over who was responsible for what Mr Hain has called "administrative failings".
Steve Morgan, who is now working on Hillary Clinton's US presidential campaign, said he was brought in halfway through the election "to bring order to the chaos". But Phil Taylor, who headed Mr Hain's campaign when the election began, told BBC Wales yesterday that the donations, totalling £37,000, made while he was in charge were all declared immediately on the day they were given. "There was no financial chaos in Peter's campaign," he said.Reuse content