Police examine 'black hole' in Hain's finances

Police are to investigate a yawning "black hole" in Peter Hain's campaign spending, as a senior member of his team revealed that they had no idea where much of the £185,000 collected was spent – let alone where it came from.

The former cabinet minister, who resigned last week, will have to itemise full details of his expenditure – including spending sanctioned even before the Labour deputy leadership campaign began – amid continuing confusion about the complex financial arrangements that surrounded the "Hain4Labour" vehicle.

The Electoral Commission is understood to have raised questions about Mr Hain's expenditure when it referred the case to Scotland Yard.

A source close to Mr Hain's failed campaign has revealed