Tories' 'hypocrisy' over donations

The Conservative Party has used almost £500,000 of funding to support Mr Osborne's office - at the specific request of the donors - without being reported in Register of Members' Interests.

Mr Osborne insisted that the failure to declare the cash was based on a misunderstanding of guidance from the Registrar of Members' Interests, Alda Berry.

But Labour MPs said the rules were clear and the shadow chancellor should have known the cash had to be reported.

The Tories have piled pressure on Labour over recent party funding embarrassments, including Peter Hain's current difficulties over undeclared donations to the Electoral Commission.

International development minister Shahid Malik said: "It doesn't matter whether it's come through 17 different parties, if he is the beneficiary of donated money then he has a duty to report it to the commission and the Parliamentary authorities. George Osborne, within 30 days of receiving that benefit, should have registered it.

"This is just an example of the blatantly opportunistic hypocrisy that undermines politics and democracy in this country. It would be much better for Osborne to say, 'yes, it's less than perfect, we are going to put it right'."

A document obtained by the Mail on Sunday revealed that £487,000 donated to Conservative Central Headquarters (CCHQ) was used to pay for staff in Mr Osborne's office at the behest of the seven backers who offered the cash.

Mr Osborne insisted the Conservative Party had been seeking guidance from Commons officials about whether his financial support should be declared.

"These donations are to the Conservative Party, they are openly declared and we have followed the rules as they were explained to us," he said. "All the donations over £5,000 have been declared to the Electoral Commission and are available for all to see on their website, as the law requires."