Lord Drayson, the Defence Minister, became the first major speaker to be heckled at this year’s Labour conference.

The former vaccine research company chief turned politician was criticising actions of animal rights extremists when the heckler branded medical researchers "abusers" and labelled as "rubbish" claims that animal testing was necessary.

Lord Drayson - who in 1993 founded PowderJect Pharmaceuticals plc in Oxford which specialised in the production of vaccines - told delegates that animal extremism was the "one subject that got me into politics".

"I was chairman of the biotech industry association when violent attacks on scientists working in my industry became intense," he added when the heckler called out "abusers".

The heckler called out again but was drowned out by applause from the audience. Stewards in the conference hall looked on nervously but resisted challenging the heckler.

Last year octogenarian Walter Wolfgang was bundled out of the conference by officials after heckling the, then, Foreign Secretary Jack Straw’s speech on the Iraq war.

Funding hell-hole

Jack Dromey, Labour's party treasurer, admitted today that the party's finances were in a "hell of a hole".

Mr Dromey told the annual conference in Manchester that Labour’s deficit currently stood at £27 million.

He said the party had been wrong to try to raise money through "secret loans" and vowed to plug the gap with traditional fundraising and strong financial controls.

"We have got a serious problem but not a crisis," Mr Dromey told delegates.

The party needed to be reinvigorated at "grass roots" level and the budget cut by 20 per cent to tackle the deficit.

Mr Dromey sparked a row when he said earlier this year that he knew nothing of the loans made to Labour in the run up to last year’s general election. The "loans for peerages" affair is now under police investigation.

Today, he told the Manchester gathering: "2006 has been a dramatic year. It was a shock to our system, which finally faced us up to this simple reality.

"Parties spent more, engaged less and lost the confidence of the public."

The "arms race" to raise cash by the political parties was "wrong and unsustainable".

Jack Straw, the Leader of the Commons, insisted that there was "absolutely no evidence" of any need to end trade union funding of the Labour Party.

He said a consensus was needed on party funding reform.

But he warned: "That consensus will require the Tories to lay off those two and a half million trade union members who pay the political levy."

Nuclear support

Alistair Darling, the Trade Secretary, signalled his support for a new generation of nuclear power stations.

He said demand for energy must be reduced and energy efficiency increased, with more locally generated power and more "large scale" wind farms.

As much of the UK’s nuclear plants reach the end of their lifespan, he told delegates: "We need a mix of electricity generation, including nuclear power."

Mr Darling said that at a time of massive economic change across the globe, Britain could not and should not compete on low wages and low skills.

"We can, we must, seize the opportunity to become a world leader in combating climate change - creating new jobs and industries here in Britain."

Pension anger

Trade union leaders at the Labour Party conference accused the Government of spending "millions on bombs but peanuts on pensions".

In a debate on party policy, the unions spoke out against raising the state pensions retirement age to 68.

Malcolm Sage from the GMB union, led the opposition to "any suggestion that the state pension age should rise before health inequalities in the UK are eradicated and improved longevity is equally shared by all."

He was also "very concerned" that the link between the basic state pension and average earnings is not due to be restored before 2012.

"We are spending billion on bombs and peanuts on pensions," he said.

Barry Camfield, from the TGWU, added to the criticism: "We want to abandon this threat to voiceless children today that they will have to wait until 68 for their pension and I nor my union are prepared to mortgage and sell out children in years to come. We stand up now for those children."

Appealing to whoever succeeds Tony Blair as Labour leader, he added: "This wealthy country of ours needs to be changed in favour of ordinary working people.

"Our purpose isn’t just to govern, it’s to change and we need to abolish poverty once and for all."

The raising of the state pension retirement age is among a package of measures put forward by the Government to tackle the pensions shortfall.

But John Hutton, the Work and Pensions Secretary, said that the changes were needed in the face of higher life expectancy.

"Our pension reforms will be regarded as one of the most significant changes to the welfare state since 1945.

"We have not ducked the difficult decisions. That is why we will align the state pension age with the welcome fact that we are all living longer.

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