Hain admits more donations were not registered

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Indy Politics

Labour's secret donations crisis deepened yesterday despite Gordon Brown's attempts to steady the party's nerves, as a leading cabinet minister admitted that more mistakes had been made during his deputy leadership campaign in the summer.

Peter Hain, the Work and Pensions Secretary, disclosed that donations to his campaign "were not registered as they should have been". Last week, he admitted failing to register a 5,000 donation from Jon Mendelsohn, Labour's chief fundraiser.

Mr Hain said he was checking on all his donations but the discovery that more had not been registered was "extremely regrettable and I apologise". Friends said the problems had nothing to do with David Abrahams, the property developer who secretly gave 600,000 to Labour through intermediaries.

Labour MPs are furious that the Government has been knocked off course by the controversy but rallied round when the Prime Minister decided to address their weekly meeting at short notice last night.

Mr Brown said: "I am determined to deal with this problem rigorously, surgically and deal with it now. I am very angry. I am as furious as anybody." He recognised the anxiety and anger of MPs, and promised to tackle the problems that had risen by bringing in legislation to clean up political funding.

His proposals include a 50,000 cap on individual donations to parties, a 150m limit on total spending by the parties over a five-year parliament and greater transparency on the way that unions pay affiliation fees to the Labour Party. One-off payments to Labour from unions would be subject to the 50,000 ceiling but affiliation fees would not.

Unions are said to be "dismayed" that they are being cast in the role of scapegoat for mistakes made by Labour. But they are likely to back the changes proposed by Mr Brown.

But his plan is unlikely to win the support of the Tories. David Cameron promised yesterday that his party would re-enter all-party talks on funding but only if all the unions' payments counted towards the cap.

The plot thickened yesterday when George Crawford, a Newcastle property lawyer, asked police to investigate a 36,000 donation made to Labour in his name in 2004. "I did not give this money and I believe that my identity has been used by someone who did," he said. Several years ago, he worked for Mr Abrahams, but was not linked to him at the time of the donation in his name.

It emerged yesterday that Harriet Harman spent more than 96,000 on her successful campaign to win Labour's deputy leadership this summer almost double the 50,000 budget of Alan Johnson, the Health Secretary, who she narrowly defeated in the election.

The Electoral Commission is investigating whether Ms Harman should have declared a 40,000 mortgage extension she took out to pay for her campaign, which ended 22,800 in the red.

Pressure mounted on Wendy Alexander, Labour's leader in Scotland, to resign after she accepted a 950 donation from a Jersey businessman, which broke the rules because he was based outside the UK. The Scottish National Party said her position was "untenable".

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