22/03/2006

NEC chair attacks Clarke over loans criticism

The Labour Party's loans woes have taken several twists since treasurer Jack Dromey declared he had no knowledge of millions of pounds worth of loans made to the party last week.

National Executive Council chair Sir Jeremy Beecham has attacked Home Secretary Charles Clarke who had criticised Mr Dromey in his capacity as party treasurer. Sir Jeremy said Mr Dromey had acted "perfectly properly."

The Prime Minister faced a 90-minute grilling by furious members of the Labour Party's NEC, but any hope Mr Blair may have had that the issue would go away when the NEC wrested back control of fundraising activities from Downing Street were soon to be dashed.

The NEC, which for a decade been sidelined by the Blairite's presidential style, said it had "unanimously" agreed to resume its "rightful responsibility" for overseeing "appropriate structures" for the parties funding and financing arrangements.

NEC members are concerned that the party could be faced with financial difficulties as the secret loans are called in.

Labour backbenchers are calling for Mr Blair's head over the disastrous "Peerage-gate" debacle.

It also emerged that following complaints, Scotland Yard have become involved, investigating allegations that peerages were offered for substantial loans.

The Metropolitan Police confirmed they were investigating complaints made by three parties under Section 1 of the Honours Act 1925.

The Labour Party has claimed that no parliamentary rules were broken, as loans are not covered by the current regulations governing the disclosure of party funding.

(SP/GB)

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