22/11/2011 05:27 GMT | Updated 22/11/2011 06:27 GMT

Political Party Funding Report Likely To Be Rejected Amid Deadlock Between Labour And Tories

A report on funding of political parties published on Tuesday looks likely to be rejected because the Tories and Labour are unwilling to let go of their big donors.

Sir Christopher Kelly, chair of the Committee on Standards on Public Life, wants limits on the amounts millionaires and trade unions can pledge to parties, and replace the current system with taxpayer funding based on the number of votes the parties get.

In addition to the wrangling between the parties, Tuesday's report on political party funding is considered impossible to get past voters, since it would mean taxpayers' money being spent on campaigning at election time. So the end result is likely to be the current system remaining.

Sir Christopher accepts that the public wouldn't be happy with forking out to fund the parties, but believes that the current system has led to accusations of sleaze and political interference by wealthy Tory donors and Labour-supporting union barons.

"There are examples in the past where a suspicion of a connection with a donation anad a change in policy has been alleged," he told a news conference on Tuesday morning. "There have been examples in the past where parties, put under pressure, have avoided the rules, and took loans when loans were not transparent."

He was referring to the major political scandal which broke out five years ago, where loans made particularly to the Labour party had been made, seemingly without the knowledge of the Labour party treasurer at the time, Jack Dromey. He is now a Member of Parliament. These loans formed part of the so-called "Cash for Honours" row which engulfed Tony Blair's government in the mid-noughties.

Sir Christopher told journalists on Tuesday: "The basic point is a system which depends on very large donations from a few individuals, which most politcal parties depend on for their very existence, is not one which the public ought to regard with anything other than suspicion in my view."

However his report looks likely to be rejected because he is calling for a cap on donations to parties of £10,000. His report concludes this is "the only safe way to remove big money from party funding." Such changes would make it difficult for wealthy financiers to continue to fund the Tories in the way they currently do.

Likewise the report calls for changes to the way Labour is funded by the trade unions. At present union members don't have to give money to the Labour party, but they have to opt-out of doing so. Sir Christopher is calling for this to be reversed, and for members to have to specifically ask to opt-in to funding Labour.

Labour have already said they are opposed to this change, although they have simultaneously attacked the Tories for refusing to accept the £10,000 donor cap. So it seems the long-running deadlock over the problem looks set to remain.

The Electoral Comission's statistics for donations to political parties in the second quarter of 2011 show that while personal donations have increased, 85 per cent of Labour donations since Ed Miliband became leader were from unions.

The Conservatives are the biggest fundraisers, raking in over £2m in individual donations. The party's second biggest cash donation was £100,000 from oil magnate Alexander Knaster, ranked 938 in financial magazine Forbes’ list of billionaires.

Latest figures available show that despite its heavy union funding, the Labour party remains £10 million in debt.