Taxpayers may fund new policy forums

Tony Blair has warmed to proposals that political parties should be part-funded by taxpayers' money, to stop embarrassing cash-for-favours allegations and split campaigning from policy-making.

The Prime Minister's most senior advisers have indicated there is now support for state funding of new policy bodies for each of the three main parties. Campaigning and electioneering would continue to be funded by trade union and private donations.

Labour has recently set up a new policy-making forum, Forethought, which is to be developed, if the opposition parties can be persuaded to buy into the idea, as a state-funded policy-making body.

Government insiders insist that despite the Conservatives' public hostility to the idea, some key figures in the party are coming round to state funding. It would suit the Liberal Democrats who struggle for funding.

The policy bodies would be able to second civil servants to work on new ideas, and to bring in external experts from universities, businesses, trade unions, charities and politically sympathetic think tanks.

Insiders believe that this would be popular with members of the public, allowing parties to "hit the ground running" after being elected.

Crucially, the system would allow private individuals, companies and trade unions to continue funding political parties without there being the appearance that there was a direct link between cash donations and policy changes.

Labour has suffered because high-profile donors became increasingly reluctant to give money after a string of criticisms surrounding large gifts, which some claimed had influenced policy. The party is now £6m in debt.