Labour under pressure on donation from Kenwright

The Labour Party was urged last night to give back a £200,000 donation by Bill Kenwright, the millionaire theatre impresario and majority shareholder in Everton Football Club. Den Dover, Conservative MEP for the north west, said the Labour party should hand the money back immediately to avoid any suggestion of "a conflict of interest" over the development of a new football stadium for Everton that relies on £15m of Government funding.

Everton hopes to move from its current ground at Goodison to a £155m arena at Kings Dock on the banks of the Mersey. The new stadium-cum-conference centre will be 50 per cent owned by the football club and 50 per cent by publicly funded bodies.

Funding for the new 55,000-seat stadium comes from a variety of sources. Everton will provide £30m – giving them a 50 per cent stake in the arena – with another £65m coming from public funds, including £35m from the EU.

Two Government quangos – English Partnerships and the North West Development Agency – have both pledged £7.5m each to the project. But any sums over £5m – under Treasury rules – must be signed off by central Government.

Mr Dover, who sits on the EU's budget committee, said last night: "That £200,000 donation should be paid back to Mr Kenwright by the Labour Party because there is clearly a conflict of interest. The money must go back immediately so that [Mr Kenwright] is seen as lily-white at this delicate time in the negotiations."

But Mr Kenwright, whose donation was accepted by Labour on June 13 2002, said any suggestion that the payment was intended to secure special access or favours was "nonsensical". Mr Kenwright, the vice chairman of Everton, told the IoS: "Apart from my family there are three things in my life that I cherish – my country, my home town and my football club, and I support them as much as I possibly can. Any suggestion this [donation] is to secure public funding is beyond contempt."

He said the opportunity to build the 55,000-seat arena at Kings Dock on the banks of the Mersey was "fantastic" for Liverpool. The stadium will double as a music venue and conference centre. He said: "Everybody involved wants the Kings Dock to succeed on Merseyside. This is not just for Everton Football Club."

Because of the large sums involved the final say on the funding will rest with Government ministers. It could also have a say on final planning permission.

Besides the money from the two quangos, another £15m to fund the arena will come from Liverpool City Council and a further £35m from the EU. The rest of the money will come from a £20m commercial mortgage and £40m from private developers who in exchange for the money will be given the right to build homes, offices, a cinema, shops and a hotel on land adjacent to the arena.

Defenders of the scheme say it will create 3,000 jobs and bring two million more visitors and £23m a year into the city.

Everton will play 25 to 30 matches a year at the stadium but can also expect a share in the profits from the myriad, other events held there, including conferences and pop concerts.

While there is no suggestion that donors seek to buy influence, supporters of state funding of political parties insist that the appearance of a link between cash gifts and policy decisions is undermining politics and politicians.

Paul Tyler, the Liberal Democrat Commons spokesman, said yesterday: "Until we have open and honest state funding of democracy the suspicion will grow that influence and access can be bought."