LORD SAINSBURY of Turville faces being called before an inquiry into the extent of his multimillion-pound donations to Labour.

The billionaire Minister for Science was accused by politicians on all sides yesterday of colluding in a form of political corruption after Labour announced that he had made a £2.5 million donation.

The gift is believed to be the largest single donation in the party’s history and takes his contributions to Labour since 1999 to £8.5 million.

Lord Sainsbury, a junior minister at the Department of Trade and Industry since 1998 and a peer since 1997, is among a list of possible witnesses at the forthcoming inquiry by the Electoral Commission, which is to make recommendations to Parliament on future arrangements for party funding. It will launch its investigation in May.

But sources close to the commission, which has the power to recommend action on single big donations, said it was likely that major donors such as Lord Sainsbury would be called.

Theresa May, the Conservative Party chairman, told BBC Radio 4’s Today programme: “The fact that Lord Sainsbury is a government minister — he was appointed by the Prime Minister and, indeed, he is in a ministerial position where he’s making decisions which could have commercial consequences — I think raises real questions about this particular donation.

“Politics is better in this country if political parties are funded by large numbers of people rather than relying on large donations from a smaller number of people.”

Mark Seddon, a member of Labour’s National Executive Committee, claimed such donations were causing Labour to lose members amid criticism from the grassroots that the party was now “in the pockets of the powerful and the rich”.

He told the Today programme: “In any other country I think a government minister donating such vast amounts of money and effectively buying a political party would be seen for what it is, a form of corruption of the political process.

“This was a criticism of the Conservatives when they were in government and increasingly people are looking in at the political parties and saying, ‘Why don’t they have more members?’ ” The Labour Party should instead raise funds by appealing for members while political donations should be capped and banned altogether for ministers, Mr Seddon added.

In a statement yesterday, Lord Sainsbury said: “In our democracy political parties have to raise funds to campaign and put their policies to the electorate, and as a proud supporter of the Labour Party I am happy to be in a position where I can make a contribution to its ongoing work.”

David Triesman, the party’s general secretary, said: “As a member of Labour’s audit committee, Mark Seddon should be aware that the largest area of growth in the party’s income last year was indeed from individual members and supporters making small contributions.

“The Labour Party has the broadest base of funding of any party, with the largest proportion of our income coming from small donations.”

A Labour spokesman said there was no particular significance in the timing of the donation. The party has a £6 million overdraft and a £4.5 million mortgage on its London headquarters.

Lord Sainsbury has made other large charitable donations, reflecting his interests in technical education, mental health and Third World development through his charitable trust, the Gatsby Foundation.

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