Brown 'offered proxy loan'
Gordon Brown says anonymous donations to Labour party were illegal and will be returned
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Tuesday, 27, Nov 2007 08:15
Gordon Brown has revealed that staff at his Labour leadership campaign rejected an anonymous donation from David Abrahams.
The prime minister told reporters that the publicity-shy property developer had offered the gift through his associate Janet Kidd earlier this year.
Environment secretary Hilary Benn has already revealed a donation made in similar circumstances during his campaign to be elected deputy party leader was also rejected.
But Labour chair Harriet Harman, who won in her bid to replace John Prescott as deputy leader, is understood to have accepted an anonymous donation from Mr Abrahams.
Defending Ms Harman, Mr Brown said that the donation had been accepted in "good faith".
Under electoral law gifts made through a third party are only illegal if the source of the money is evident.
Yesterday the general secretary of the Labour party resigned after it emerged more than £600,000 had been given to the party by Mr Abrahams anonymously.
Peter Watt admitted he had cleared the donations but was unaware of the relevant parts of the Political Parties, Elections and Referendums Act 2000.
Speaking at No 10 today, Mr Brown said he was unaware of the proxy donations until Saturday night.
He said that the practice was "completely unlawful and cannot be justified", adding that the money would be returned.
"There will have to be changes," the prime minister explained. "We will take all steps to achieve these changes and insist on our party imposing the highest standards in the future."
The fresh donations scandal, which follows the cash-for-honours inquiry, comes at Mr Brown's most difficult point as prime minister.
The government was already facing criticism for its handling of the Northern Rock crisis when it emerged last week that HM Revenue and Customs had lost the personal details of 25 million child benefit claimants.