The Labour Party's election campaign war chest is to swell by another £4 million, it announced yesterday, on foot of two significant donations from party supporters. The Science Minister and supermarket chairman, Lord Sainsbury, will donate £2 million to the party's coffers later this month while the former Conservative supporter, Mr Christopher Ondaatje (67), who will join Labour has already made a £2 million donation.
The gifts bring recent donations to the party to £6 million. But donations to party funds have caused problems for Labour this week. Two days of embarrassing speculation about the identity of an anonymous £2 million donor - the publisher, Lord Hamlyn, who had hoped to remain anonymous because he has cancer, subsequently identified himself as the donor - threatened to escalate into a scandal.
Labour insisted it did not have to identify the donor under current rules, but was accused by backbenchers and the Conservatives of acting against the spirit of new legislation on openness and political funding which comes into force next month. The chairman of the Parliamentary Labour Party, Mr Clive Soley, who criticised the leadership for not naming Lord Hamlyn immediately, said he was now moving toward a policy of state funding for political parties to replace large, individual donations.
Speculation that a general election is close was fuelled by Lord Sainsbury's confirming statement: "With a vital general election approaching, I intend to make a u £2 million donation this month in the hope that it will help ensure the re-election of a Labour government."
Mr Ondaatje, who received a CBE for his charitable work last year, said he had become disillusioned with the Conservatives because they were divided over Europe and the economy.
Labour denied it was relying too heavily on individual donations, pointing out that only 20 per cent of party funding came from large donations. But the Shadow Cabinet Office minister, Mr Andrew Lansley, criticised the announcement, saying Labour's "continuing reliance" on a small number of large donors highlighted the need for a broader based system of political party funding.