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Labour donations to be returned Labour donations to be returned
(22 minutes later)
Gordon Brown has said donations to the Labour Party by a property developer 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 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 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.
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.
Advice on safeguardsAdvice 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. At his monthly press briefing Mr Brown said it appeared to have been a practice which 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". Once the facts were established, Mr Watt's resignation was "a necessary first step" but the party would also return the money.
Mr Brown said he had appointed the retired judge Lord McCluskey and the former Bishop of Oxford, Lord Harries, to advise on the changes that needed to be made in relation to donations.
DONORS Ray Ruddick - £196,850Janet Kidd - £185,000 since 2003John McCarthy - £202,125 since 2004Source: Electoral Commission Your reaction to donor rowDONORS Ray Ruddick - £196,850Janet Kidd - £185,000 since 2003John McCarthy - £202,125 since 2004Source: Electoral Commission Your reaction to donor row
Meanwhile Labour veteran Lord Whitty will draw up a report on what had happened.
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.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.
'Mistakes made'
Asked if he knew Mr Abrahams Mr Brown said: "I am sure I may have met him but I have no recollection of any conversations about any of these issues.
"I had no knowledge until Saturday night, either of the donations or of the practice which had grown up where they were improperly declared to the Electoral Commission. No knowledge at all."
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 David CameronConservative leader Another crisis for Brown Key figures react
He added: "Mistakes have been made. There will have to be changes. I will take all steps to achieve these changes. We must insist on our party imposing the highest standards in future."
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 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.
It's a whole sleazy area; it needs cleaning up because of lack of public confidence Vince CableLib Dem acting leader Profile: Peter Watt Profile: David Abrahams
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."
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.
Mr Watt said he had resigned "with great sadness"
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.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.
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.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.
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.
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.