Read about the controversy on Sam Coates's blog

Peter Hain faced calls to resign from the Cabinet today as Westminster's sleaze watchdog began investigating his failure to declare more than £100,000 in donations to his Labour deputy leadership campaign.

The office of the Parliamentary Standards Commissioner, John Lyon, confirmed this morning that he had received a formal complaint concerning the conduct of Mr Hain, who is both Work and Pensions Secretary and Welsh Secretary.

The complaint, which was made by the Conservative backbencher David Davies, came after Mr Hain yesterday admitted that he failed to declare the backing of 17 donors to his campaign, coming to a total of £103,156 – half of whose donations were funded through a little-known think-tank.

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In the long term, Peter Hain’s career in Government looks over

Greg Hurst, Political Correspondent of The Times

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• Q&A: is Peter Hain's ministerial career over?

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The Cabinet Minister said he did so due to "administrative failings" rather than having a malicious intention to deceive.

This afternoon, however, calls were increasing for Mr Hain to resign, and one former Labour election coordinator told Times Online that the saga had left Gordon Brown furious and represented "a serious error of judgment".

Mr Davies, the MP for Monmouth, said: "I really find it hard to see how he can continue in both these important positions (Work and Pensions Secretary and Welsh Secretary) if he is the sort of man who forgets about £100,000."

His calls were followed by the Welsh nationalist party, Plaid Cymru, whose Westminster leader Elfyn Llwyd told BBC Radio 4: "The whole thing, I think, is a total circumvention of all the rules appertaining to elections and I think that, as a Cabinet minister, it will be very difficult for him to stay in office."

Speaking to Times Online, Chris Grayling, the Tory Shadow Work and Pensions Secretary, stopped short of calling for his resignation, but said he would have to go if the Standards Commissioner punished him with a suspension from the House of Commons.

"Hardly an hour seems to go by without something else coming out. I am baffled by the whole thing. I defended him in November, when the first £5,000 (undeclared donation) came out. But I struggle to see how you can just fail to report £100,000," he said.

"The best thing is to let the investigation take its course. But if we were to reach the position where a Cabinet Minister was suspended from the House of Commons, it would be extremely difficult to see how he could continue in his position."

Mr Hain has remained tight-lipped today. However, in a statement last night, he revealed that among the 17 backers he failed to declare were Willie Nagel, a diamond broker, and Isaac Kaye, the former head of a drug company that was raided by police investigating an alleged £400 million rip-off of the NHS.

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