Hain ‘could face police investigation’

Peter Hain could face a police investigation into his failure to declare £103,000 donated to his deputy leadership campaign.

The Electoral Commission has begun its preliminary investigations into why Mr Hain did not declare any donations after May last year, with preliminary findings expected by the end of the week.

If Mr Hain is found in breach of the rules governing party donations the electoral commission can do no more than chastise him, as it only has the power to fine political parties, not individuals.

However, under legislation passed by the Labour government the Electoral Commission can refer the case to the police, who could launch an investigation under the Political Parties, Elections and Referendums Act 2000.

A commission spokeswoman told reporters last night: “We are not commenting on whether it is an option or not an option.

“All we are saying is we are doing our initial compliance checks and will put the information we receive into our registers. Should there be any compliance issues, we will follow them up.”

Mr Hain is already being investigated by the parliamentary ‘sleaze watchdog’ after a complaint by Conservative MP David Davies. John Lyon, the parliamentary standards commissioner said yesterday there was “a case” for Mr Hain to answer.

The Cabinet member insists the donations went undeclared as a result of an administrative error.

Yesterday he told the BBC: “I’ve been open and clear about this from the beginning when I discovered these donations had been made late.

“I told the public, I told you in the media, I told the relevant authorities – the parliamentary commissioner for standards and also the Electoral Commission.”

With two investigations underway and Labour MPs expressing their unease, Mr Hain’s political future is looking increasingly uncertain.

Gordon Brown appeared to withdraw support for his work and pensions secretary yesterday, telling the Sun newspaper his fate lay with the authorities.

Downing Street later insisted the prime minister still had “full confidence” in Mr Hain, who also serves in government as secretary of state for Wales.

But Ian Gibson has become the first Labour backbencher to publicly state Mr Hain should resign. The MP for Norwich North said he would stand down if he were in his position and would “feel ashamed I had let the side down”.

Speaking to the BBC’s The World at One, Mr Gibson added he was “revolted” at the suggestion the Progressive Polices Forum (PPF) was used to channel funds into the campaign.

Mr Hain has been attacked by the Conservatives for failing to fully explain why around £50,000 was channelled into his campaign through the PPF, which was set up in December 2006, three months after he launched his deputy leadership bid.

It employs no staff and does not appear to conduct research, prompting speculation it was a “slush fund” to allow donors to contribute anonymously to the Neath MP’s campaign.

Mr Hain eventually finished fifth in the six-way race, outspending the eventual winner Harriet Harman by four-fold.

In a further blow to the embattled minister, his local constituency party will discuss the furore this week.

Meanwhile, the Conservatives have faced further questions over their own reporting arrangements.

David Cameron failed to tell the Electoral Commission about three free flights taken during his own leadership campaign, although they were registered with the Commons register of members’ interests.