Labour accuses Cameron of 'cash for policies'

David Cameron is facing an embarrassing "cash for policies" row after it emerged that three members of his party's economic policy group donated money to his Tory leadership campaign.

The revelation may undermine Mr Cameron's attempts to distance himself from the controversy over the estimated £24m of secret loans accepted by the Conservatives.

The Tory leader became embroiled in the row as Scotland Yard warned MPs at a private meeting that a police investigation into the "cash for peerages" allegations against Tony Blair could be widened to cover corruption charges. John Yates, the deputy assistant commissioner who is leading the inquiry, said in a letter published yesterday that it was too early to confirm if his inquiry would cover corruption charges, but added: "I certainly have not ruled this out."

Labour MPs said they feared Mr Blair had been seriously damaged by the allegations, but Labour ministers are keen to shift the focus on to the Tories, after agreeing a strategy for handling the crisis.

Today it will be confirmed by the Electoral Commission that Mr Cameron has refused to match Labour by disclosing the identity of the Tory lenders, saying the loans were agreed on condition of anonymity under the leadership of his predecessor Michael Howard.

Labour is claiming that people can buy influence over Tory policies. An economic competitiveness policy group, appointed by Mr Cameron, is co-chaired by Simon Wolfson, chief executive of the Next fashion group, who gave £10,000 to his leadership campaign. The other co-chairman is John Redwood, the former cabinet minister.

The group, which will help to draft new Tory policies by next year as part of Mr Cameron's root-and-branch review, also includes Adam Afriye, MP for Windsor, who gave money to his leadership campaign and donated £11,000 to the Conservative Party last year.

Another member is Andrew Feldman, a friend of Mr Cameron from Brasenose College, Oxford. His family firm, Jayroma, donated to the leadership campaign and he is credited with helping to raise £415,000 for it. He now acts as a fundraiser for the party.

"It looks like dodgy Dave is rewarding his personal paymasters by handing them control over party policy," said a senior Labour official. "This is another example of Mr Cameron's hypocrisy." A spokesman for the Conservative leader dismissed Labour's charge, saying: "It's frankly ludicrous to suggest that membership of the policy group has been affected by donations to David Cameron's leadership campaign. We are not doing them a favour by putting them on the policy group. They are doing the party a favour by agreeing to serve on it. All these people are highly successful entrepreneurs with a huge amount of knowledge on economic competitiveness."

The Electoral Commission has given the political parties until today to provide assurances that any loans they received were on commercial terms similar to those obtainable at high street banks.

Jonathan Marland, the Tory treasurer, has resisted pressure to disclose the names of supporters who made loans because they were made on a confidential basis. Some Tory donors are said to be worried that their companies could miss out on government contracts if their names become public.

The Tories' annual report disclosed that they had struck agreements with some donors under which the party was allowed to delay the repayment of loans if they could not meet the scheduled repayments.

The commission may regard such flexible arrangements as a backdoor donation which should be disclosed under a law brought in by Labour in 2000 rather than a loan on a commercial basis.

A former Tory treasurer Lord McAlpine called on his party to release the details of the loans, telling BBC's Today programme: "If the loans are completely honest and straightforward there should be no reason why anyone would worry about that."