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Labour donations to be returned Labour donations to be returned
(10 minutes later)
Gordon Brown has said donations received by the Labour Party through middlemen were "completely unacceptable" and would be repaid. Gordon Brown has said donations to the Labour Party by a property developer through middlemen were "completely unacceptable" and would be repaid.
The prime minister said he had "no knowledge" of £600,000 of donations from property developer David Abrahams and they could "not be justified". The prime minister said he had had "no knowledge" of £600,000 of donations from property developer David Abrahams and they could "not be justified".
"The money was not lawfully declared so it will be returned," he said."The money was not lawfully declared so it will be returned," he said.
Peter Watt's resignation as Labour general secretary was "a necessary first step" but more had to be done.Peter Watt's resignation as Labour general secretary was "a necessary first step" but more had to be done.
DONORS Ray Ruddick - £196,850Janet Kidd - £185,000 since 2003John McCarthy - £202,125 since 2004Source: Electoral Commission Your reaction to donor row
Mr Watt stood down after it emerged that property developer David Abrahams donated nearly £600,000 to the party, over four years, under three associates' names.Mr Watt stood down after it emerged that property developer David Abrahams donated nearly £600,000 to the party, over four years, under three associates' names.
At his monthly press briefing Mr Brown is also set to be grilled about the loss of 25m people's personal details. Advice on safeguards
At his monthly press briefing Mr Brown said it appeared it was practice that had been going on "for some years" but he was first told about it on Saturday evening.
Once the facts were established, Mr Watt's resignation was "a necessary first step" but the party would also return the money and "senior people" would be asked to advise on safeguards Labour could apply "to the receipt and declaration of donations".
DONORS Ray Ruddick - £196,850Janet Kidd - £185,000 since 2003John McCarthy - £202,125 since 2004Source: Electoral Commission Your reaction to donor row
He also said a donation from Janet 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.
The Tories say Labour is "in crisis" and "simply don't obey the law".The Tories say Labour is "in crisis" and "simply don't obey the law".
The Electoral Commission is investigating whether the donations breached the Political Parties and Referendums Act 2000 and has confirmed it has been "in touch" with the Crown Prosecution Service.The Electoral Commission is investigating whether the donations breached the Political Parties and Referendums Act 2000 and has confirmed it has been "in touch" with the Crown Prosecution Service.
'Defies credibility''Defies credibility'
Mr Abrahams donated the money through colleagues Janet Kidd and Ray Ruddick, and solicitor John McCarthy.Mr Abrahams donated the money through colleagues Janet Kidd and Ray Ruddick, and solicitor John McCarthy.
After that emerged, following a Mail on Sunday report, Mr Watt resigned, telling Labour's National Executive Committee he knew about the arrangement, but had believed he had complied with reporting obligations.After that emerged, following a Mail on Sunday report, Mr Watt resigned, telling Labour's National Executive Committee he knew about the arrangement, but had believed he had complied with reporting obligations.
I have to accept we made a terrible error in this situation Dianne HayterLabour's NEC Another crisis for Brown Key figures reactI have to accept we made a terrible error in this situation Dianne HayterLabour's NEC Another crisis for Brown Key figures react
The Tories say this explanation "defies credibility". Tory leader David Cameron accused the government of demonstrating "an indifference for the law" over issues like the donations and lost data discs.The Tories say this explanation "defies credibility". Tory leader David Cameron accused the government of demonstrating "an indifference for the law" over issues like the donations and lost data discs.
He told business leaders at the CBI conference: "They say you've got to have this bit of security, that bit of compliance, and whether it's their own government departments or their own party machines, they simply don't obey the law.He told business leaders at the CBI conference: "They say you've got to have this bit of security, that bit of compliance, and whether it's their own government departments or their own party machines, they simply don't obey the law.
"There is a time in the life of every government when it slips over from complacency into arrogance, and from arrogance into even indifference for the law. I say we've reached that point and it is time for real change in our country.""There is a time in the life of every government when it slips over from complacency into arrogance, and from arrogance into even indifference for the law. I say we've reached that point and it is time for real change in our country."
Shadow chancellor George Osborne said Labour was "now officially in crisis".
Northern RockNorthern Rock
It comes amid a torrid week for the prime minister which has seen loss of millions of child benefit records, the ongoing Northern Rock crisis and attacks from former army chiefs.It comes amid a torrid week for the prime minister which has seen loss of millions of child benefit records, the ongoing Northern Rock crisis and attacks from former army chiefs.
Under the law, those making donations on behalf of others must give details of who is providing the money.Under the law, those making donations on behalf of others must give details of who is providing the money.
It has also emerged that Hilary Benn initially turned down a £5,000 donation for his deputy leadership campaign from Mr Abrahams, because it was made in Janet Kidd's name.It has also emerged that Hilary Benn initially turned down a £5,000 donation for his deputy leadership campaign from Mr Abrahams, because it was made in Janet Kidd's name.
He later accepted it when Mr Abrahams wrote him a cheque in his own name and reported it as required. Labour is investigating the donations and the Electoral Commission has also asked the party to explain. He later accepted it when Mr Abrahams wrote him a cheque in his own name and reported it as required. Fellow deputy leadership contender Harriet Harman, who won the election, did accept a £5,000 donation "in good faith" from Janet Kidd.
Harriet Harman did accept a £5,000 donation "in good faith" from Janet Kidd, however Mr Brown said he had rejected a donation from her during his leadership campaign. Asked about Ms Harman's decision to accept the money, Mr Brown referred to her statement that she had taken the money in good faith. He gave her his support.
Dianne Hayter, from Labour's National Executive Committee, told the BBC they thought they had "thorough and complete" systems in place to check donations were legitimate - but Mr Watt had not told the NEC that the donations had come from Mr Abrahams.
'Deep shock'
Asked about her reaction when she heard the news, she said: "First of all, disbelief and then when I was absolutely convinced this was the case - deep shock. I was amazed."
She said the donations had been made over a number of years, in smaller amounts and the individuals who sent them in had been "checked out".
Mr Watt said he had resigned "with great sadness"Mr Watt said he had resigned "with great sadness"
She said she had to accept a "terrible error" had been made but said it was not "institutionalised corruption" and she was confident it was a "one off".
According to the Electoral Commission, Mr Ruddick has donated £196,850; Mrs Kidd has donated £185,000 since 2003; and Mr McCarthy £202,125 since 2004.According to the Electoral Commission, Mr Ruddick has donated £196,850; Mrs Kidd has donated £185,000 since 2003; and Mr McCarthy £202,125 since 2004.
Newspapers report that Mr Ruddick and Mrs Kidd are listed as directors of a property company, Durham Green Developments, which won planning permission for a multi-million pound business park - and Durham City Council had confirmed Mr Abrahams was involved in negotiations.Newspapers report that Mr Ruddick and Mrs Kidd are listed as directors of a property company, Durham Green Developments, which won planning permission for a multi-million pound business park - and Durham City Council had confirmed Mr Abrahams was involved in negotiations.
Acting Liberal Democrat leader Vince Cable said that "an enormous can of worms had been opened up" regarding party funding reform and that the government should have brought in new regulations.Acting Liberal Democrat leader Vince Cable said that "an enormous can of worms had been opened up" regarding party funding reform and that the government should have brought in new regulations.
"It's a whole sleazy area; it needs cleaning up because of lack of public confidence, " he said."It's a whole sleazy area; it needs cleaning up because of lack of public confidence, " he said.
A ComRes survey suggests that Labour has suffered a six-point slump to 27% in a month, giving the Tories a large lead despite falling one point themselves to 40%.A ComRes survey suggests that Labour has suffered a six-point slump to 27% in a month, giving the Tories a large lead despite falling one point themselves to 40%.
It surveyed 1,002 adults by telephone on 23 to 25 November and the results were weighted.It surveyed 1,002 adults by telephone on 23 to 25 November and the results were weighted.