PM faces sleaze row over £2m 'slush fund'

Tony Blair is embroiled in a new row about sleaze, after a local authority watchdog said it was investigating allegations that Labour is using council taxpayers' money for a £2m campaign "slush fund".

Labour has ordered its councillors to pay a proportion of their allowances to help the party wipe out its massive debts or else face disciplinary action.

The Standards Board for England is investigating the levy after a complaint by the former Labour leader of Sunderland Council, Bryan Sidaway. The party is said to have breached the board's code of conduct, which requires that councillors' allowances should not be used for political purposes unless it is for the good of council taxpayers.

Eric Pickles, the Conservative spokesman on Local Government, said: "It does seem to me that the Labour Party is getting a £2m slush fund." Labour responded that the money was from "councillors personally and not the council".