Tories begin to rebuild their party

Redwood refuses to disclose his fund donors

John Redwood is the only Tory leadership candidate refusing to identify the donors to his campaign fund. All the other contenders will give details of their main contributors to the registrar of members' interests, but Mr Redwood, shadow minister for trade and industry, will only reveal that Conservative 2000, the right-wing think tank, paid for his campaign. Individual donors will not have to be listed.

Mr Redwood said last night: "I have checked with the registrar and he says that this is perfectly acceptable. All the money went through Conservative 2000 and they have a large membership. It would be ridiculous if everyone who bought a pamphlet from them had to be listed." Conservative 2000 is run by Hywel Williams. Mr Williams is a close friend of Paul Sykes, the millionaire businessman who funded Tory candidates at last month's election as long as they promised to oppose a single currency. Mr Sykes backed Mr Redwood's leadership campaign, but fell out with him over Mr Redwood's support for Ken Clarke.

It is the first time that the candidates for a Tory leadership election will have to reveal the identity of substantial donors to their campaigns.

Previously, leadership campaigns of both main parties were carried out without any requirement on the candidates to declare sources of funding. However, the registrar of members' interests, Roger Willoughby, has advised the candidates that any "substantial donations" will have to be revealed in the register to ensure that no complaints are made against members. The rules are unclear about whether such donations should be declared but Mr Willoughby is keen to avert a situation in which complaints are made. Mr Willoughby refused to be drawn on how much "substantial" means but, for example, Mr Clarke will be releasing details of any donation of pounds 1,000 or over.

While initial estimates suggested that each campaign would cost around pounds 10,000, the combined total bill for all six leadership candidates is likely to be around pounds 250,000, mostly provided by wealthy Tory supporters.

William Hague, who won the Tory leadership election, spent pounds 84,000, more than any other candidate, on his campaign, including a donation of pounds 20,000 from the managing director of the controversial City Mortgage Corporation, David Steene. The City Mortgage Corporation has been criticised for charging some clients penal rates of interest but Mr Hague's office said last night he had no comment on the concerns over City Mortgage Corporation.

The City Mortgage Corporation lends to homeowners who have been turned down by other mortgage lenders under contracts which allow for increased rates if borrowers fail to make a payment.

Paul Flynn, the Labour MP for Newport West said: "In one case, a man was charged 9 per cent interest until he missed a payment and then it jumped to 18 per cent." The company justifies its higher rates by saying it takes on clients that are higher risk than other lenders.

Mr Hague, whose headquarters were at the offices of Tory MP Jonathan Sayeed, spent heavily on a round-Britain tour and his biggest backer was Lord Harris, the carpets millionaire, the Tory party's former treasurer. Mr Redwood said his spending, which had not been finalised, would be "less than William's". Mr Redwood's main expenditure was on three full- colour pamphlets, the hire of halls and, most expensively, the set used in his press conferences held in Church House. However, he said: "The bill will come to much less than the amount spent by William. I did not go on a grand tour round Britain, but made three journeys for meetings."

Mr Clarke said his main source of expenditure was a promotional video. Contrary to previous press reports, Mr Clarke emphasised that he would be publishing full details of the cost of his campaign. He said: "I spent far less than William but that was not the reason for my defeat. I ran by far the most efficient campaign and was helped by large numbers of student volunteers who received only expenses."

He rented offices in the same building as the left-leaning Tory think- tank, the Macleod Group. Mr Clarke said that there would only be "one or two" donations above pounds 1,000 that he would need to declare but the bills were not yet all in.

Peter Lilley, now the shadow chancellor, said in a statement that he spent pounds 27,000 on his campaign and "no single donation was more than pounds 5,000". The accounts would be published "soon".

Michael Howard, now the shadow foreign secretary, said that he would be giving full details to the registrar but the accounts were not yet ready. Mr Howard's biggest backer was Lord Hansen, who also paid for a champagne party for Mr Howard's campaign held in Jonathan Aitken's house.

Stephen Dorrell, who withdrew from the campaign early on, also said he would be releasing details of his accounts.

Hague's backers

Lord Harris pounds 50,000

David Steene, City Mortgage Corporation pounds 20,000

Jamie Borwick, chief executive Managanese Bronze Holdings pounds 6,100

William Salomon, director, Rea Brothers pounds 5,000

Valerie Bright, director, Mother Nature Ltd pounds 2,000

Philip Bassett, chartered accountant pounds 1,000