Senior Labour figures tried to stop the Electoral Commission from scrutinising the forthcoming leadership election in too much detail, The Times has learnt.

The watchdog rebuffed attempts by party chiefs who argued that the election that would decide the future Prime Minister was an internal Labour matter. The commission refused to back down and insisted that it play a full role in the leadership debate, as required by law.

This comes as Gordon Brown’s leadership bid is being closely monitored by the Electoral Commission, which is examining it for evidence of unregistered campaign donations.

Under the Political Parties, Elections and Referendums Act 2000, candidates in a leadership race have 60 days to declare campaign donations. Currently Mr Brown does not register any contributions in the register of members’ interests or with the Electoral Commission.

An Electoral Commission source said: “We would assume Gordon Brown doesn’t need any money. He would take the line there’s no campaign going on at the moment and he doesn’t have a website.

“But we have two declared candidates, John McDonnell and Michael Meacher. What is interesting is that we have another undeclared candidate. You don’t have to be declared to receive money. It would be a pity if someone’s campaign was announced through a declaration of funds to the Electoral Commission.”

Chris Grayling, the Tory MP, said: “Anyone who has ever been involved in setting up a political leadership campaign will know that it is wholly impossible to do so without financial and other help and support which should be declared to both the House of Commons Authority and the Electoral Commission.

“Of more concern still is the fact that there are more and more reports that the Chancellor has set up all the infrastruc-ture of a leadership campaign but buried it in the Treasury or third-party organisations such as the Smith Institute.”

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