Labour boss quits in row over unlawful donations

8.30.00am UTC (GMT +0000) Wed 28th Nov 2007

Labour general secretary Peter Watt has resigned following the revelation that a property developer made donations to the party via three associates. David Abrahams gave almost £600,000 over four years through colleagues Janet Kidd and Ray Ruddick, and solicitor John McCarthy. Mr Watt admitted he had known about the arrangement. Under the law, those making donations on behalf of others must give details of who is providing the money. Mr Watt claimed he did know this. However the Liberal Democrats have highlighted that an email sent from the Electoral Commission to a number of political party officials, including Mr Watt personally, in July last year, set out explicitly that this was required. The Electoral Commission is investigating whether the donations broke the law. Gordon Brown said today the donations were "completely unacceptable" and would be repaid. He said a donation from Ms Kidd had been offered to his own leadership campaign, but had been rejected as only donations from people known to the campaign had been accepted. Hilary Benn's deputy leadership campaign also turned down a donation from Ms Kidd. However Harriet Harman accepted a £5,000 donation for her campaign from Ms Kidd which turned out to have come from Mr Abrahams.

Acting Leader of the Liberal Democrats said "This sleazy affair is far more serious than initially thought and could be a matter for a criminal investigation. We need to know which ministers knew about these donations. And why did Harriet Harman accept money from an unknown donor when both Hilary Benn and Gordon Brown turned it down? Most importantly we need new legislation to reverse the arms race in party spending and the over dependence on rich individuals by setting strict caps on donations and strict limits on party spending. Gordon Brown promised a new style of politics upon becoming Prime Minister, but this promise, like so many others, has proven to be false."