Labour donor turns down life peerage

A millionaire supporter of Labour education reforms has said he no longer wants to be considered for a life peerage after being embroiled in a cronyism row.

Barry Townsley is one of four men with financial links to the Government whose names were put forward by Downing Street for elevation to the Lords last year. The move triggered fresh accusations that Tony Blair was rewarding wealthy businessmen who bankrolled the party or its policies.

At least 14 Labour donors are believed to have received peerages in the past 10 years and a senior adviser to the city academies programme resigned last month after he was caught encouraging businessmen to fund schools in return for honours. Mr Townsley, a stockbroker, has given sponsorship worth £1.5m to Stockley Academy, Hillingdon, west London, a city academy. He also contributed £6,000 to the Labour Party and £10,000 to Frank Dobson's unsuccessful campaign to be London mayor in 2000.

The list of peers has been held up while it is scrutinised by the honours watchdog, the House of Lords appointments commission. Speculation has intensified recently that commission members are concerned about some of the names they have been asked to approve.

Mr Townsley told friends he was withdrawing his name because he felt the publicity he has endured did not make elevation to the House of Lords worthwhile. The move by Mr Townsley, 59, who is a close friend of Lord Levy, the Labour fund-raiser, may allow the impasse between the commission and Downing Street to be broken and the list to be approved.

Labour's list of peerages also contains Sir David Garrard, a millionaire property developer who gave £200,000 to Labour in 2004 and contributed £2.4m to the city academy in Bexley, south-east London. He was knighted two years ago for his charity work.

Two other major Labour donors are included; Dr Chai Patel, who runs the Priory clinics, and has contributed to the party at least twice, and Sir Gulam Noon, who made millions from ready-made curries.

There is no suggestion of wrongdoing by anyone on the list but commission members are understood to have complained that the link between financial support and peerages was becoming "ridiculous".

What they gave

* Lord Sainsbury of Turville - Received peerage in 1997. Has given £13.5m since 1995

* Lord Drayson - Received peerage in 2004. Gave £100,000 2001 and £1m in 2004

* Lord Gavron of Highgate - Received peerage in 1999. Gave £500,000 in 1996, £500,000 in 1999

* Lord Paul - Received peerage in 1996. Gave £309,000 from 1996-98

* Lord Bernstein of Craigweil - Made peer in 2000. Gave £200,000 in 1997

* Lord Joffe of Lidington - Received his peergage in 2000. Donated £25,000 in 1997 and £10,000 in 2001

* Lord Bhattacharyya of Moseley - Received peerage in 2004. Gave £30,000 in 1998 and £5,000 in 2000