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Brown to answer 'crisis' claims Brown to answer 'crisis' claims
(about 2 hours later)
The Conservatives have accused the government of being "in crisis" after Labour's general secretary resigned in a new row about party funding.The Conservatives have accused the government of being "in crisis" after Labour's general secretary resigned in a new row about party funding.
Peter Watt stood down after it emerged that property developer David Abrahams donated nearly £600,000 to the party, over four years, via three associates.Peter Watt stood down after it emerged that property developer David Abrahams donated nearly £600,000 to the party, over four years, via three associates.
Prime Minister Gordon Brown is set to face tough questions over the issue at his monthly press conference later.Prime Minister Gordon Brown is set to face tough questions over the issue at his monthly press conference later.
Shadow chancellor George Osborne said Labour is "now officially in crisis".Shadow chancellor George Osborne said Labour is "now officially in crisis".
He said: "Everything Gordon Brown promised about his premiership - competence, honesty and change - has been blown away in the last few weeks."He said: "Everything Gordon Brown promised about his premiership - competence, honesty and change - has been blown away in the last few weeks."
It is clear that there are many more questions that need to be answered about this whole affair Vince CableActing Lib Dem leader Another crisis for Brown Key figures react It's a whole sleazy area; it needs cleaning up because of lack of public confidence Vince CableActing Lib Dem leader Another crisis for Brown Key figures react
Mr Osborne's comments come 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.Mr Osborne's comments come 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.
The shadow chancellor also demanded to know whether Mr Brown was aware of the donation, adding that it was "beyond belief" that Mr Watt had not objected to the money.The shadow chancellor also demanded to know whether Mr Brown was aware of the donation, adding that it was "beyond belief" that Mr Watt had not objected to the money.
Shadow work and pensions secretary Chris Grayling questioned the government's competency in light of the latest problem, and also demanded a "full disclosure of events".
"I still feel it's extremely mysterious money, questions are unanswered, and I hope the Labour Party provides full answers to all the questions put to them."
Mr Watt told a meeting of officers of Labour's National Executive Committee he had known about the arrangement.Mr Watt told a meeting of officers of Labour's National Executive Committee he had known about the arrangement.
Mr Abrahams has since described Mr Watt's resignation as "sad".Mr Abrahams has since described Mr Watt's resignation as "sad".
DONORS Ray Ruddick - £196,850Janet Kidd - £185,000 since 2003John McCarthy - £202,125 since 2004Source: Electoral CommissionDONORS Ray Ruddick - £196,850Janet Kidd - £185,000 since 2003John McCarthy - £202,125 since 2004Source: Electoral Commission
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.
Mr Abrahams gave the money through colleagues Janet Kidd and Ray Ruddick, and solicitor John McCarthy.Mr Abrahams gave the money through colleagues Janet Kidd and Ray Ruddick, and solicitor John McCarthy.
Labour is investigating the donations and the Electoral Commission has also asked the party to explain.Labour is investigating the donations and the Electoral Commission has also asked the party to explain.
Dianne Hayter, from Labour's National Executive Committee, told BBC Breakfast: "The donations were absolutely above board but the way we reported them was inadequate.
"We made a mistake, we're talking to the Electoral Commission and the record will be corrected."
She added that the Labour Party was "committed to complete transparency" and that the NEC had not been aware that the donations had breached regulations as only Mr Watt knew where they came from.
BBC political editor Nick Robinson said he had been told there may be a fourth person "used as a cover" to make payments on behalf of Mr Abrahams.BBC political editor Nick Robinson said he had been told there may be a fourth person "used as a cover" to make payments on behalf of Mr Abrahams.
In his resignation statement, Mr Watt - who has been Labour general secretary since 2005 - said he had always prided himself on "having complete integrity" but added that, as general secretary, he was legally responsible for the reporting obligations for the party.In his resignation statement, Mr Watt - who has been Labour general secretary since 2005 - said he had always prided himself on "having complete integrity" but added that, as general secretary, he was legally responsible for the reporting obligations for the party.
Mr Watt said he had resigned "with great sadness"Mr Watt said he had resigned "with great sadness"
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.
Acting Liberal Democrat leader Vince Cable said: "It is clear that there are many more questions that need to be answered about this whole affair. 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.
"Gordon Brown promised a new style of politics upon becoming prime minister, but this promise, like so many others, has proven to be false." "In the Queen's Speech there was no reference whatever to promised legislation on party funding, which is the problem.
"It's a whole sleazy area; it needs cleaning up because of lack of public confidence. There was no promise to do anything about it."
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.