Cameron 'must stop accepting Ashcroft donations'

DAVID CAMERON faced demands today to suspend donations from Tory backer Lord Ashcroft as election watchdogs began an inquiry into the legality of his gifts to the party.

The Conservative leader came under pressure as the Electoral Commission formally started its investigation into up to £5 million of donations given by a company owned by Lord Ashcroft.

The inquiry into Bearwood Corporate Services will check claims that the firm does not "carry on its business in the UK", a key requirement for donations.

Bearwood, which was set up by the deputy party chairman, is by far the biggest corporate donor to the Tories. But Lord Ashcroft has extensive business interests in Belize, a former British colony in central America, and has refused to discuss his tax status in the UK.

Labour MP Denis MacShane called for the suspension of donations from Lord Ashcroft's company to the Tories while the inquiry was continuing.

He said: "David Cameron should stop accepting all donations to the Conservative Party from Bearwood Corporate Services while such a serious investigation is going on.

"Lord Ashcroft is not just the Conservative Party's biggest donor, but sits in Central Office running their election campaign.

'It's now time David Cameron stopped ducking the issue of Lord Ashcroft's relationship with the Tory party and sorted out the shadowy funding arrangements that have become systematic under his leadership."

Shadow defence secretary Liam Fox said yesterday that the party was "confident" that the donations were legal and permissible under electoral law.