Cameron's fury at plan to curb rich backers

David Cameron has intervened directly in an independent inquiry into political funding to demand a more favourable outcome for the Conservatives and a severe clampdown on Labour's trade union donations.

The Independent has learnt that the Committee on Standards in Public Life is to propose a £10,000 cap on donations to parties by individuals and organisations to "take the big money out of politics".

The parties would be compensated by a multimillion-pound increase in state funding. There would be stricter controls over the affiliation fees paid by the unions to Labour but they would not be subject to the cap.

Mr Cameron has made a last-minute appeal to the committee to revise its draft proposals. The Tories, who have more rich donors than other parties, favour a £50,000 cap.

Mr Cameron's move has upset some members of the committee, which is chaired by Sir Christopher Kelly and is due to report next month after a 17-month inquiry. It includes a representative from each of the three main parties and six independent members.

"Cameron has thrown his toys out of the pram," one independent source said. "We had a consensus and were ready to publish, and this has delayed it." Labour and the Tories have long disagreed over whether union money should count towards a cap. But the level of the ceiling could now prevent an agreement being reached between the parties.

Lord (Andrew) Feldman of Elstree, the Tories' co-chairman and a friend of Mr Cameron, has sent a strongly worded letter to Sir Christopher, a copy of which has been obtained by The Independent.

"The Prime Minister has asked me to write to you," Lord Feldman wrote. "The Prime Minister and I were very disappointed to learn that you believe that there should be a donations cap that applies to all Conservative and Liberal Democrat party funding, but that specifically excludes a major source of funding to the Labour Party.

"There is a fundamental principle at stake here –the rules on donations should apply equally to all parties and should apply equally to individuals, companies and trade unions alike."

Lord Feldman added: "The argument for introducing a cap on donations is to deal with the perception, accurate or not, that big-money donors buy influence over political parties in a way in which the public would not approve. The trade unions are the clearest example of a donor having policy influence as a result of their donation ... It would be perverse if a cap were to be introduced which did not address this most obvious issue."

The Tories' co-chairman was "disappointed" to learn that the committee's draft report proposes a £10,000 donations cap, claiming that would be the "wrong level". He argued: "A cap of £10,000 would hugely inhibit the ability of political parties to engage with the electorate."

Opposing more state funding for parties, Lord Feldman said: "It seems to me deeply unlikely that the public will accept handing over significant sums of taxpayers' money to political parties at a time when the Government is having to make tough decisions and cut public spending. There is a significant risk that this approach will further undermine the reputation of politics and politicians – in direct contrast to the aims of the process."

He told Sir Christopher: "I appreciate you are advanced in your deliberations on this matter, but hope you will have time to reconsider before publication."

Although the Kelly inquiry has consulted all the parties, the tone of the Feldman letter has angered some committee members. Labour fears that Nick Clegg will side with Mr Cameron when he draws up the Government's response to the proposals. The Liberal Democrats have also backed a £50,000 cap, while Labour told the inquiry a much lower one of £500 would be "more equitable, democratic and less susceptible to avoidance".

However, a Liberal Democrat source said: "Nick Clegg will not take sides. He will do all he can to find a consensus, using the Kelly report as the basis."

A Labour spokesman said last night: "In government, Labour always sought to pursue party funding reform through consensus and that has been our approach to the Kelly inquiry. It is deeply disappointing if the Conservative Party leadership is now intervening at a late stage with the work of an independent committee to secure narrow political advantage."

Labour claimed the move was part of a "pattern of behaviour" in which the Tories were playing "fast and loose" with the political system, citing the shake-up of constituency boundaries and new rules bringing in individual rather than household voter registration.

Sir Christopher said last month that his committee's report would provide a fresh, independent look at party funding to "deal with this issue before another funding scandal forces change."

Reform Proposals

A £10,000 cap on donations to parties by individuals and organisations.

A range of options for increased taxpayer funding, which could be based on between £1 and £3 for every vote received.

One-off trade union donations subject to the cap, but affiliation fees paid by members treated differently.

Unions would have to make clear members have right to opt out of paying political levy and ensure those doing so pay a lower membership fee; unions could not "over-affiliate" by saying they have more members paying the levy than they do.