Tory threat to party funding talks

Labour denounced Mr Cameron's intervention as an attempt to sabotage the talks, which are intended to thrash out a consensus on funding to restore public faith in the political system in the wake of the cash-for-honours affair.

But the Tory leader said that proposals currently on the table amount to "a sham of a clean-up" which would allow parties to pocket an extra £90 million of taxpayers' money to clear their debts, without giving up their dependence on the "big donor culture".

The row broke out as a senior Cabinet member hinted that Mr Brown may seek to impose tighter limits on spending in individual constituencies, in a bid to bring a halt to Tory millionaire Lord Ashcroft's targeted funding of marginal seats.

Chief Whip Geoff Hoon told GMTV's The Sunday Programme: "I think it's important that we restrain the amount of money that can be spent on Parliamentary elections... I am worried about the way in which one man, in this case Lord Ashcroft, appears to be dominating one political party in order to influence the outcome of elections in particular parliamentary constituencies."

The all-party talks, which began after Sir Hayden Phillips' inconclusive report on political funding in March, hit stalemate due to Labour's unwillingness to accept that a Tory-proposed £50,000 cap on donations should apply to money from unions.

Labour argues that the union donations should be regarded as a set of smaller gifts from individual members, but Tories say they will only accept this for a "transitional" period so long as members are free to choose whether to pay an affiliation fee and which party the money should go to.

Conservatives, meanwhile, are resisting Labour demands for the limit on election spending to be extended beyond the campaign weeks, to plug a loophole which allows Lord Ashcroft and other big donors to pour millions of pounds into "permanent campaigning" in key seats for many months before the poll is called.

In a letter, Mr Cameron urged Mr Brown to step in personally to salvage the talks, and warned he would pull his party out if Labour refused to accept the donation cap.

The package on offer from Labour would be seen by voters as "nothing more than a fix by political parties behind closed doors to line their pockets", said Mr Cameron.