Life peer gave Labour £505,000

A tycoon who is at the centre of a sleaze row over a government contract gave Labour a gift of £505,000 shortly after he was awarded a life peerage.

A tycoon who is at the centre of a sleaze row over a government contract gave Labour a gift of £505,000 shortly after he was awarded a life peerage.

The Government provoked anger two years ago when it awarded a £32m contract to supply smallpox vaccine to PowderJect Pharmaceuticals, a firm founded by the Labour donor Lord Drayson.

There were fresh calls for a cap on party donations after the Electoral Commission revealed yesterday that Lord Drayson had given the party another £505,000 on 17 June, six weeks after being awarded the peerage.

The latest handout by the industrialist dwarfs his previous total donations to Labour of £100,000. Lord Drayson's company is believed to have made a £20m profit when the Government placed its order after the 11 September attacks in 2001.

A committee of MPs found no evidence that the deal was influenced by his donations but rival companies claimed they were excluded from bidding.

After selling his company recently, Lord Drayson described himself as a "very successful guy through my own hard work". Martin Bell, the former independent MP, said the Drayson donation underlined the need for a cap on individual gifts.

He added: "The problem is that the parties have such expensive campaigning styles that they can't be financed by ordinary members."