I did nothing wrong, says Harman

There were angry Commons exchanges on the disguised donations affair for the second day running as the Tories claimed the Government was now tainted by "sleaze".

Shadow leader of the House Theresa May hit out: "The public know sleaze when they see it, the people know spin when they hear it and the voters will know what to do when they have their say. They will get rid of this sleazy Labour Government."

She also referred to Ms Harman's husband, Labour treasurer Jack Dromey, who insists he knew nothing of the affair, saying: "You, the Prime Minister and the Labour Party treasurer are like the three wise monkeys. You see no evil, hear no evil and speak no evil."

Ms Harman's team accepted £5,000 from Janet Kidd to help pay for her successful campaign to become Gordon Brown's number two, money which was in reality given by property developer David Abrahams.

But she insists her team knew nothing about the proxy arrangement and accepted the donation - now being paid back - "in good faith" as Ms Kidd was registered as a donor to the party in the past.

Ms Harman told MPs during routine Business Questions: "In respect of my deputy leadership campaign and donations to my deputy leadership campaign, myself and my campaign team acted at all times in good faith. We acted at all times within both the letter and the spirit of the law."

Mr Abrahams gave more than £650,000 in total to Labour via proxy donors, a practice described by Mr Brown as unlawful.