Renewed pressure on Brown over funds

Britain: British prime minister Gordon Brown again found his integrity questioned yesterday, while the man at the centre of …

Britain:British prime minister Gordon Brown again found his integrity questioned yesterday, while the man at the centre of Labour's concealed funding scandal claimed 10 party officials were aware of his practice of making donations by proxy.

That allegation, coupled with the clear warning of potentially more embarrassing disclosures to come from property developer David Abrahams, coincided with fresh embarrassment for Labour - this time the revelation that its second-largest donor is an Iranian-born French citizen not entitled to vote in British general elections.

In Scotland, meanwhile, Mr Brown's close ally and Scottish party leader Wendy Alexander was resisting pressure to resign in a row over her acceptance of a donation from a Jersey-based businessman.

At the same time, the simmering resentments between Blairites and Brownites, largely controlled since the leadership change this summer, resurfaced publicly with two former ministers suggesting Mr Brown has yet to develop a convincing vision and might soon be approaching his "sell-by" date.

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The morale of Labour MPs, already reeling at the news of another police investigation into Labour funding, took another blow as an ICM poll confirmed an 11-point lead for David Cameron's Conservatives. Internal party tensions were set to deepen following the disclosure by Observer columnist Andrew Rawnsley that Tony Blair believed Gordon Brown had set him up "for a fall" over the "cash-for-honours" affair.

Well-placed sources confirmed Rawnsley's account of "a ferocious row" between the former prime minister and the then chancellor of the exchequer, in which Brown allegedly threatened the man he sought to replace: "I'll get you over the peerages."

The sources confirmed Mr Blair was so alarmed by Mr Brown's behaviour that he reported this conversation to cabinet secretary Sir Gus O'Donnell.

As Rawnsley recalled, it was soon after this that Jack Dromey, Labour Party treasurer and husband of Brown ally Harriet Harman, publicly complained he had been kept in the dark about secret loans raised by Labour before the 2005 election.

That complaint paved the way for the damaging police inquiry that dogged Mr Blair's final months in office and helped force him to stand down sooner than he had wished.

Mr Cameron insisted it "beggars belief" that Mr Brown knew nothing about the donations made by proxy by Mr Abrahams, or that his recently-appointed fundraiser Jon Mendelsohn "didn't know what the law was".

The prime minister has said he had "no knowledge" of the unlawful funding arrangement, while Mr Mendelsohn admitted he had discovered it after taking up his post in September and had intended bringing it to an end.

However, Mr Abrahams appeared determined to keep Mr Mendelsohn in the frame, asserting that he had in fact known of the arrangement since last April. Mr Abrahams said he had been seated beside Mr Mendelsohn at a dinner, during which he not only told how he made donations to the party through intermediaries for the purpose of anonymity, but claims Mr Mendelsohn told him "that sounds like a good idea".

Mr Mendelsohn insisted this latest statement by Mr Abrahams was "fictional and completely untrue", adding that he (Mendelsohn) would be co-operating fully with the police inquiry. However, the conspicuous attempts by senior ministers to distance themselves from Mr Abrahams since the scandal broke appears to have made a potentially dangerous enemy of the previously publicity-shy donor.

In statements and a newspaper article, Mr Abrahams suggested Mr Brown had been "badly let down" by his fundraiser and Labour's compliance practices. "In the absence of anyone admitting administrative error, the furore has been fuelled by spin, Chinese whispers, even downright dissembling on the part of some party figures," he said.

Of Mr Mendelsohn's account of when he learned of the unlawful practice, Mr Abrahams warned: "He would be well advised now to stop damaging himself and the party's credibility. He was one of a very few people who were aware of this method of making donations."

Mr Abrahams' spokesman subsequently said that this small number of people amounted to "about 10".

Claiming the idea of a £50,000 "cap" on all party donations as his own, Mr Cameron said he would respond to Mr Brown's call for a new party funding settlement provided that meant a change in Labour's relationship with the trade unions. However, he dismissed Mr Brown's attempt to link the two issues. "This is a simple matter of law-breaking, and the issue of party funding is separate," he insisted.