Labour Faces Enquiry Over Property Developer Donation

Labour is facing an independent inquiry into its finances after a businessman admitted donating hundreds of thousands of pounds to the party and keeping his role a secret.

David Abrahams, a property developer, has admitted to secretly donating £4000,000 to Labour by giving it to two of his employees who then passed it the party.He has confirmed that he "gifted" sums of money to Ray Ruddick and Janet Kidd, in order for them to pass the cash on as donations to Labour.He said he had taken this step on several occasions in order to protect his privacy since new rules were introduced in 2000 requiring large donors to be named.

According to the Electoral Commission, Mr Ruddick has donated £196,850 to Labour and Mrs Kidd £185,000 since 2003. Each of them is listed as giving £80,000 on a single day in July this year. Between them, they are listed as having given the party £222,000 since Gordon Brown became leader in June, making them collectively his third biggest donors after Lord Sainsbury and businessman Mahmoud Khayami.

Jack Straw has voiced concern over the transparency of the gifts, and the Electoral Commission has called on Labour for an explanation of the circumstances surrounding the donations. Disclosure laws say anyone donating money to a party on behalf of someone else must declare that person's identity at the time.