It was the least she could do, a feminine touch from the woman who boasts of her place in the “lilac revolution” of successful female politicians sweeping to power across the world.

“Dear Janet,” began Harriet Harman’s handwritten note of thanks to the Newcastle upon Tyne secretary who had just given £5,000 to her campaign. “Best wishes & please keep in touch,” it concluded.

Sadly for Ms Harman, the questions over how she came to accept a donation from Janet Kidd, someone she had never met nor heard of, are wider than those of etiquette. Ms Harman’s political career was threatened last night as full details began to emerge of an incautious scramble for cash.

Her friends say that it was on Friday that Ms Harman first learnt that her benefactor was not, in fact, Janet Kidd but a controversial Newcastle businessman, David Abrahams, when a reporter called to check details of the gift.

The donation was given only a glancing mention in the subsequent Sunday tabloid exposé of what appeared to be serial attempts by Mr Abrahams to disguise donations to Labour. In the house in Dulwich, South London, that Ms Harman shares with her husband, Jack Dromey, the Labour Party treasurer, the alarm bells will have been ringing furiously. It was, after all, Mr Dromey who blew the whistle on Labour’s attempts to dodge electoral law by taking millions in secret loans, a move that dramatically heightened the cash-for-honours affair. Now it appeared that the Labour Party treasurer had been ignorant of a second systematic breach of electoral law, this time one that benefited his wife directly.

Gordon Brown, by contrast, was relatively unconcerned initially by the Mail on Sunday story. The Prime Minister was assured that no one in the Labour Party knew that Mr Abrahams had been using Mrs Kidd and another business associate, Ray Ruddick, to channel money to party coffers. Nevertheless, Mr Brown ordered an investigation. The inquest began at the Labour Party’s headquarters, in Victoria Street, London, on Monday morning with senior officials gathered around a copy of The Times that spelt out the relevant section of electoral law. It was at this point that Peter Watt, Labour’s general secretary, dropped his bombshell. He had known about Mr Abrahams’s activities, he told stunned colleagues. Almost immediately he left to phone Mr Brown and resign.

By now Labour MPs familiar with Mr Abrahams’s colourful past were beginning to ring No 10 with their concerns. The more Mr Brown’s aides heard, the more concerned they became, especially as one remembered that Mr Brown had been offered cash, believed to be £25,000, from the same source. Relief that the Prime Minister had not accepted a donation from the property developer or his associates was tempered by anger over Ms Harman having taken the money.

By yesterday morning Mr Brown knew that Ms Harman’s acceptance of the donation posed a serious political problem. The Conservatives sought to fuel the controversy by highlighting how plans by two of the intermediaries used by Mr Abrahams for a business park were rescued by the intervention of ministers. Douglas Alexander, Transport Secretary at the time, denied all knowledge of the donations and said that he was not involved in the decision.

Chris Grayling, a prominent Shadow Cabinet member, also asked if Mr Abrahams secretly bankrolled Labour’s successful by-election campaign in Sedgefield, Co Durham, on July 19. This was based on a series of donations by Mr Abrahams through middlemen having been made a week earlier, amounting to £215,000.

Privately, senior figures in Downing Street were furious at what they regarded as Ms Harman’s incompetence. In his monthly press conference at No 10 yesterday, the Prime Minister conspicuously failed to give his deputy his full backing. Even as Mr Brown was speaking, Ms Harman’s troubles deepened dramatically with the release of a statement from Hilary Benn who revealed that he, too, had turned down the offer of a gift from Mrs Kidd.

One of Mr Benn’s campaign team, Baroness Jay of Paddington, had alerted him to Mrs Kidd’s true status as Mr Abrahams’s cipher, the statement said. The developer had been asked to give in his own name and had done so.

Suddenly Ms Harman’s actions looked yet more incompetent. If Lady Jay, who left the Cabinet five years ago, had known of the illegal arrangement, why had not Ms Harman or her husband, the Labour Party treasurer?

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