Sleaze watchdog hits out at Blair over cash-for-honours

Tony Blair has been accused by the Government's sleaze watchdog of failing to do enough to restore public trust in government, following the cash-for-honours scandal.

Sir Alistair Graham has criticised Mr Blair's ethical record and called for urgent action to restore trust in public life.

The chairman of the Committee on Standards in Public Life said he fears that Mr Blair's plans to review funding of political parties will not restore the confidence of the public. He wants the public to be able to give their views on how political parties are funded, to avoid a "stitch-up" between the parties.

Sir Alistair is understood to be frustrated by the lack of commitment by Mr Blair to ethical issues. He recently met Gordon Brown for a private meeting and is said to have been impressed by the Chancellor's interest in restoring public confidence in the Government.

Sources close to Sir Alistair said the sleaze watchdog was now hopeful that Mr Brown would inject more energy into resolving sleaze issues if he becomes prime minister. "Gordon Brown obviously takes standards issues seriously," said one source close to Sir Alistair.

At a meeting of the Committee on Standards in Public Life last week, Sir Alistair expressed his frustration at a string of scandals. Committee members believe that Mr Blair's pledge in 1997 to be "purer than pure" on ethical issues in government is in jeopardy. Sir Alistair's intervention will embarrass Mr Blair whose image has been damaged by the loans-for-peerages affair.

In an interview with The Sunday Times, Sir Alistair criticised the Prime Minister for treating standards as a "minor issue, not worthy of serious consideration". He accused Mr Blair of "a major error of judgement".

Police are currently investigating the Government's decision to offer peerages to millionaires who had donated to the party and lent it money.

Sir Alistair told friends last week that he is worried by the impact of the cash-for-peerages affair on public life. "He is really worried that Downing Street has not taken these issues seriously enough and has even damaged the Government's standing," one friend said.

Polls have shown a huge public backlash following the cash- for-honours affair. A poll for today's Sunday Telegraph shows that 54 per cent believe peerages were offered in return for donations or loans to Labour.