Conservatives step up attack on 'dead man walking' Hain

Strict limits will be imposed on campaigns by candidates in future internal Labour elections to prevent a repeat of the Peter Hain controversy. More than £750,000 was raised in donations by Gordon Brown and the six candidates for the Labour deputy leadership for last summer's election. Many Labour figures now believe the sums spent were excessive.

Mr Brown raised £215,000 for his leadership campaign and took part in hustings meetings even though no one else secured the required number of nominations to challenge him for the top job. Mr Hain secured donations of £185,000, some £103,000 of which was declared belatedly last week.

Mr Hain came under renewed fire in the Commons yesterday amid Tory calls for his resignation. Answering questions in his role as Welsh Secretary and speaking in a debate as Work and Pensions Secretary, Mr Hain faced a maelstrom of criticism of his handling of the donations affair.

The Tory MP Nigel Evans told him: "Given your growing lack of credibility and the mire which now surrounds you, wouldn't the best prospect for new jobs in Wales be for you to quit your two jobs today?" Another Tory MP, Philip Dunne, described the minister as a "dead man walking".

The Tories also attacked the Department of Work and Pensions over claims that it handed out national insurance numbers to thousands of illegal immigrants.

Chris Grayling, the shadow Work and Pensions Secretary, said: "Just when the Secretary of State thought that things couldn't get any worse the chaos spreads to another part of his job."

A defiant Mr Hain accused the Tories of getting their facts wrong. He told Mr Grayling: "You are making accusations about national insurance numbers and comparing them with work permits when they are not the same thing. Total national insurance numbers issued to non-EU nationals and numbers of work permits cannot be compared, which is what you are seeking to do."

Mr Brown defended Mr Hain during Prime Minister's Questions, saying: "I have confidence in what he is doing."

Labour hit back last night by reporting 80 Tory MPs to the Electoral Commission over their alleged failure to declare donations channelled through patrons clubs and other "unincorporated associations."

The Labour MPs John Mann and Kevan Jones said it was impossible to check if any of the individual donors were "impermissible", whether they were on the electoral roll and whether they gave more than £1,000, in which case they should have been registered separately.

The Tories dismissed the Labour move as a "stunt," saying that Labour had raised £2m through such groups since 2001.

Mr Hain apologised to the Cabinet for "the kerfuffle" about his donations at its weekly meeting on Tuesday. The Prime Minister's spokesman said: "When Peter Hain intervened elsewhere in Cabinet, he apologised for the kerfuffle and said this was an issue affecting all parties." Later the spokesman said Mr Hain may not have used the word "kerfuffle".

Spending limits for internal party campaigns were proposed by Harriet Harman, who won the deputy leadership, before last year's elections. She argued that it would be consistent with Labour's call for a cap on spending by parties to end the "arms race" between them. But Labour's national executive committee rejected the idea amid fears that a ceiling might would be difficult to police.

This week, Ms Harman met Labour officials, who accepted the need for limits and are drawing up guidelines for future internal elections, including those for the leadership of the party in Scotland and Wales.