The Sun Online - News: Blair's �14m sleaze loans

TONY Blair secured £14MILLION from secret loans at the centre of the “cash for peerages” scandal.

Labour was yesterday forced to admit it had borrowed the cash to fight last year’s General Election.

Officials refused to name the mystery backers — or say how many there were.

The sleaze row engulfing Labour deepened amid claims that the loans were used to dodge party funding rules brought in by Mr Blair.

Labour’s high command issued a hasty email to assure MPs the money had not vanished into a slush fund.

Confirmation that Labour banked £13,950,000 comes after party treasurer Jack Dromey revealed he was “kept in the dark” over the money.

Ordinary donations have to be declared but loans do not — meaning the source of the cash remains anonymous.

But ex-Downing Street adviser Lord Haskins claimed yesterday: “I do not think for one moment any of these lenders ever had any intention of asking for their money back.

“In two to three years time the loans would have been quietly written off and that would have been history. It looks a bit dodgy.”

A senior party figure confirmed there was a ploy to ask some lenders to convert loans into donations.

The source said: “You could go back later and get the lender to say, ‘OK it will be a gift and we’ll make it public’.”

Three businessmen — Chai Patel, Sir David Garrard and Barry Townsley — loaned Labour about £4.5million. They were then nominated for peerages.

The rest of the £14million came from unnamed backers — fuelling fears that Mr Blair, who yesterday visited his constituency in Sedgefield, Co Durham, is now in hock to tycoons looking for kickbacks.

It is a severe embarrassment to the PM, who brought in rules that donations over £5,000 must be published. He also promised to be “purer than pure” if he won power.

Yesterday 15 of the party’s biggest donors denied lending the cash.

Labour spent £18million on winning Mr Blair’s historic third term in 2005.

Last night party chairman Ian McCartney wrote to MPs stressing there was no slush fund.

He said: “All funds raised were spent on re-electing Labour MPs.”

Details will be revealed in the party’s annual report in the summer — but the dozen lenders will not be named.

By MICHAEL LEA at The Sun
Political Correspondent