More lenders were offered peerages, reveals minister

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Indy Politics

The disclosure came after the Labour Party revealed that the total value of loans was four times higher than earlier thought.

Those on Mr Blair's list for Labour peerages include the entrepreneur Sir Gulam Noon,estimated to be worth £50m, who is on record as having donated £200,000 to the Labour Party.

So far, it is known that three of those on Mr Blair's list - Chai Patel, the head of the Priory rehab clinic; Sir David Garrard, a property developer; and Barry Townsley, a stockbroker - had given loans totalling £3.5m. The disclosure that more on the list gave loans will stretch Mr Blair's denials that there was any connection between cash and honours to breaking point.

A senior Labour minister said: "Three of the names have come out already but they are not the only ones. Others on the list have given loans."

The source added: "It was done by Lord Levy with the knowledge of the then general secretary [Matt Carter] and Tony Blair. Chai Patel wanted to make a donation but was told to make a loan instead. It was done to keep their names secret in terms of the loan fund."

There were also claims last night that Downing Street attempted to manage the row but the party leadership was forced to come clean on the loans after it was demanded by Jack Dromey, the party treasurer. The row escalated when he revealed he had not known about the loans until they were leaked in the press. He is preparing a report for Tuesday's national executive committee (NEC). The meeting could have become a showdown with Mr Blair, but senior figures have called for all sides of the row to avoid further damage to the party.

A total of 28 names were put forward by all the main party leaders for peerages last year, but their honours were blocked by the Lords appointments commission, which objected to some of the nominations. Mr Patel, who wrote to the commission to protest at the leaking of his name, has been removed from the list by Mr Blair. He will receive a formal letter on Monday, but a source close to Mr Patel said: "He feels very unfairly dealt with by the media. He has done nothing wrong." Mr Garrard and Mr Townsley have asked for their names to be withdrawn from consideration for a peerage.

Mr Patel blew the lid on the loans scandal when he disclosed he had been invited by Lord Levy to make a loan of £1.5m rather than a donation. None of those on the list has done anything wrong, but lenders were not required to disclose their names, and the tactic has been attacked as a means of circumventing the rules which Labour brought in to avoid allegations of sleaze.

On Thursday, Mr Blair admitted he knew that some of those on his list for peerages had made substantial loans to the party's general election campaign. He said that people should not be banned from honours because they gave donations to political parties, and denied there was any clear link. However, the pattern emerging will leave Mr Blair with more questions to answer when he appears before the NEC on Tuesday.

Ian McCartney, the Labour chairman, last night wrote to the party's MPs to reassure them that there had been no sleaze over the use of the fund. He said: "It is important we all recognise that every penny raised was used on delivering election victories for Labour and nothing else. On the specific issue of loans, it is important to emphasise that the party acted within electoral law at all times."

Mr Blair tried to defuse the row by announcing a shake-up of the rules for party funding. Ann Black, a member of the NEC, warned yesterday about moving away from trade union funding, which she said was "absolutely clean".

Sir Hayden Phillips, the permanent secretary in Tessa Jowell's Department for Culture, will lead cross-party talks on the future of party funding.

The Conservative leader, David Cameron, said he would be prepared to disclose the names of those making loans to his party.

The moneymen and the honours

* Lord Sainsbury, 63. Has donated £6.5m to the Labour Party since 2001. The former chairman of the Sainsbury's supermarket, long time Labour supporter, made three gifts of £2 million. He was made a life peer in 1997.

* Christopher Ondaatje, the author, donated £1.6m to Labour since 2001.

* Lord Drayson, 46. Donated £1.1m to Labour since 2001.

* Sir Ronald Cohen has given £1m since 2001.

* William Haughey, 43. Donated £1m to Labour since 2001.

* Chai Patel, 51. Lent the party £1.5m at commercial rates last August and said to have given the party £100,000. Healthcare entrepreneur at the centre of the peerages for cash storm after he was recommended for a peerage. He is reported to have made £25m from the Priory clinics, the country's largest psychiatric chain.

* Sir David Garrard, believed to have loaned Labour more than £1m. Donated £200,000 to the Labour party in 2003.

* Barry Townsley, 59, is said to have lent Labour £1m. Donated £6,000 last year and gave £10,000 to Frank Dobson's failed London Mayor bid. A stockbroker who withdrew his name after he was recommended for a peerage following the cash for peerages controversy. Has given £1.5m to the Stockley Academy school in west London.

* Amicus has given £11.4m to Labour since 2001, including £4.4m from its two predecessor unions, the MSF and AEEU.

* Unison has given £9.1m to Labour since 2001.

The GMB gave £7.3m to Labour since 2001.

* The TGWU has given £6.3m since 2001.