Tories classified Ashcroft cash as foreign donation

THE CONTROVERSY surrounding the Tory party treasurer, Michael Ashcroft, was reignited last night after the party itself was found to have classed his donations as "foreign".

The Conservatives claimed last week that pounds 1m of donations from Mr Ashcroft's Belize Bank Company Trust were in effect domestic because he was registered as a voter in the UK. However, according to a letter obtained by The Independent, the party told the Neill Committee on Standards in Public Life that cash paid from overseas bank accounts was foreign.

The letter, sent in January 1998 by Michael Trend, who was the party's deputy chairman, states clearly the party had identified overseas donations. "We have gone through our records and have recorded amounts paid from overseas bank accounts as foreign donations," Mr Trend wrote.

The letter was written six months after William Hague pledged in 1997 to end all foreign gifts to his party in an attempt to rid it for good of its "sleaze" image. Labour claimed last night that Mr Trend's admission undermined the Tories' defence of Mr Ashcroft last week, when they suggested that the type of bank account he used was irrelevant.

Fraser Kemp, Labour MP for Houghton and Washington East, said "Last week the Tories were saying Mr Ashcroft's donation wasn't a foreign donation, yet only a year ago [they] were defining a gift from an overseas bank account as a foreign donation," he said.

"If the Tories aren't sure what their own rules are, how can the public have any confidence in this confusion? What did William Hague mean in 1997 when he pledged the Tories would 'no longer accept foreign money?'"

Foreign donations will be outlawed under party funding legislation announced in the Queen's Speech last month.

Michael Ancram, the Tory chairman, went on television last week to say the payments accorded with party guidelines. "It doesn't make any difference whether it is from Belize Bank or a bank in Malaga. It is his money," he said.