Ed Miliband has suggested that political party funding should be reformed, with a cap on individual donations set at £5,000.
But the Labour leader insists that the political levy paid by trade union members to the Labour party should remain, something the Tories are likely to find unacceptable as negotiations on how to reform party funding continue.
Miliband told the Andrew Marr show on BBC One that even if the voluntary levy on union members remained, Labour would still stand to lose "millions of pounds".
"Just looking at the last year, and it’s important as a corrective to some of what’s out there, 40% of our income came from our members and about 40% came from the trade unions and the rest from individual donors and others, so we’re talking about a significant change here," he said.
Labour - which is struggling financially amid several million pounds of debts - has resisted Tory claims to end the large payments it receives from the trade unions. Both parties have been dragging their feet over reforming the political party funding system, which has led to a continuous stream of alleged sleaze over many years.
A report last year by the Committee for Standards in Public Life called for the taxpayer to takeover bankrolling the political parties. The committee's chairman, Sir Christopher Kelly, insisted this would be the only way to end the allegations of impropriety. Both Labour and the Tories rejected this proposal.
But the allegations of cash-for-access surrounding a sting on former Tory party co-treasurer Peter Cruddas last month acted as a watershed in the long-running debate about party funding, and the three main parties resumed talks on how to reform the system last week.
In an interview with The Huffington Post last week, constitutional reform minister Mark Harper accepted that reforms were inevitable, and would cause "pain for both parties". But he rejected outright the suggestion that the taxpayer should step in to fund party politics.
"It would be very difficult for voters to accept that while we're making tough decisions about benefits and tax and public spending, that the one thing we were going to find some resources for is giving political parties some money, " he told us.
A cap on donations of £5,000 would, on the face of it, be highly detrimental to the Conservative Party, which regularly sees six-figure sums donated to it by wealthy individuals and companies.
Suggested For You
SUBSCRIBE AND FOLLOW
Get top stories and blog posts emailed to me each day. Newsletters may offer personalized content or advertisements.Learn more