Philip Webster, Political Editor
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Hain's resignations letter | Video: the resignation
The shadow of Labour’s funding scandals threatens to hang over Gordon Brown for years after police launched an investigation into Peter Hain hours after he quit the Cabinet.
The Work and Pensions Secretary offered his resignation, and Mr Brown took it without question, after the Electoral Commission referred to the police his late declaration of £103,000 in donations to his deputy leadership campaign.
It was yet another blow to Mr Brown after a string of troubles ranging from lost computer discs to Northern Rock.
Mr Hain’s fate intensified the discomfort surrounding other Labour figures, including Harriet Harman and Wendy Alexander, involved in Electoral Commission, parliamentary or police investigations.
It appears that Mr Brown may be unable to escape the cloud of police inquiries into Mr Hain and the proxy donations of £600,000 to Labour from David Abrahams until 2009, possibly election year.
Mr Hain said he was going because he wanted to clear his name but in passing his file on to Scotland Yard the commission was effectively passing a Cabinet death sentence on him. The Prime Minister had backed him to that point but swiftly agreed with Mr Hain yesterday that he could not go on. Both appear to have decided some time ago that a referral to the police would be the last straw.
Mr Brown had been desperate to avoid an early Cabinet reshuffle as he tried to draw a contrast between his administration and the regular shake-ups of the Blair years. But Mr Hain’s departure made changes unavoidable.
There were advances for four young ministers. James Purnell was appointed to Mr Hain’s job; Andy Burnham moved from Chief Secretary to the Treasury to Mr Purnell’s job as Culture Secretary; Yvette Cooper moved into the Cabinet as Chief Secretary from Housing Minister; and Caroline Flint replaced Ms Cooper.
Paul Murphy returns to the Cabinet to take Mr Hain’s other job of Welsh Secretary.

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Lessons will be learnt
John, Essex, UK
Im bored of this Government. Can we elect another one? I will come back to the UK if that is the case.
Alex, Buenos Aires, Argentina
Has not the time come for a Government of the people, for the people?
R.B., Leicester,
The most surprising fact of the last few weeks is that 20,000 policemen marched on parliament and failed to arrest a single person for abuse of office, stealing our money, lying to the public or pretending to be a national leadership.
Come to think of it,where did we get 20,000 policemen from all of a sudden?
KR, Stockport,
Resign as he broke promises?? I remember Paddy Ashdown saying in an interview that if Tony Blair was an honourable man he wouid hold a refereremdum on PR.Is anyone left in politics who could be regarded as being honourable
stephen, reading, England
Post Peter Hain to the cabinet of South Africa.
Piet Brand, Cape Town, South Africa
You have to laugh about this incompetent Government - they
actually mange to introduce a law in which involve them and the
police. Previously competent Governments manage to decide
these matters amongst themselves- Parliament privileges.
A Walton, Leicester, England
The fact that Hain had failed to comply with the law was known and admitted weeks ago. Brown went further and described it as 'incompetence'.
Why, then, is the referal to the police the trigger for resignation? Nothing factual has changed.
Gerald Dyson, Leeds,
Two points. 1. The way Nu Labour is behaving confirms some long held thoughts that this country is like France before the revolution, when the aristocracy treated the 'peasants' like dirt. 2. Why did the contenders for the Deputy Prime Minister need any money for their campaign. All that should have been necessary was for them to announe their intention to stand.
David, Burnley, England
Ignorance is no defence; try it with the taxman!.
As a former financial adviser the regulatory body (FSA) would have thrown the book for committing minor procedural infractions i.e. no financial gain at all. THIS Labour governement introduced the funding regualtions and cannot even keep to them themselves. Incompetence of the highest order.
David, Sevenoaks, Kent
Rodney Barker - "sorry for Peter Hain who has probably no knowledge of any wrong doing".
Peter Hain was responsible for declaring all of the funding he received. If he wasn't sure, or didn't know, where the money (£180,000) was coming from he should have asked. If this amount of money came into your bank account unexpectedly and you spent it without question, you would be liable when the owner of the money claimed it back. If you didn't you would be criminally liable, this is no different.
David Leslie, Perth, Scotland
Since NuLab spun its way into power Great Britain has been reduced to a joke around the world.
Political correctness has turned a genuine multi-cultural country into a divided, tribal, xenophobic hell. Ministers daily demonstrate their incompetence and corruption while the Prime Minister equivocates on major policy decisions. Democracy died with President Blair, superseded by his anointed son who seamlessly carries on the family tradition.
The time has come for our Head of State, HM The Queen, to invoke her prerogative and dissolve parliament.
R Bingham, Lauzun, France
If M.P.s had to use their own money to get elected then the seats inside the house would be over half empty!
Derek Clifton, Andover, Hampshire, England
Surely with all of these continuing questions about party funding the whole credibility of the Brown Government is under question. He was imposed on us by Blair and now is the time for a vote of "no confidence" and hopefully the opportunity to hold a proper General Election, or is he not up to this?
Allan Coates, Wombourne, UK
Forget about hain or anything else. The Biggest scandal of the lot is the EU where Mr Brown has presided over the biggest scam in history, where this overtaxed nation has paid over 13 years £150Billion 95% of which is unnacounted for according to the EU Auditors. For this we received 120,000 laws that not one of our MP's or MEP's have read, our Democracy is smashed and others now rule us. Are we mad?
Write a letter to your MP and tell him not to sign this Constitution oops Treaty before we loose our country. According to poll after poll over 98% of our people oppose this, do you.
Mr ...........Member of Parliament.
House of Commons
London
SW1A 0AA
Sear Sir
As one of your constituents I have like you have, researched the Treaty and from what I have read by experts it is the same as the formerly rejected Constitution. Further more how can you vote on something that has not been published and will not be so until Ratified.
Please do not vote for this but VOTE AGAINST IT.
Jas, Farnborough, UK
The evidence suggests that Hain has not been open and honest. The original declaration that about £5k had not been registered soon ballooned to £100k (after this had been revealed by the Guardian!). In addition, the channelling of funds through a proxy think tank also shows that someone was aiming to deceive. That the matter has been referred to the Police indicates that they believe that a criminal (not civil) act has been committed - this may well be the case, but the Police (if not the CPS) are reluctant to pursue these cases with vigour (especially after the cash for honours affair). I suspect, therefore, that we'll be left in the dark again - a Police investigation that goes nowhere whilst the whiff of suspicion hangs over the head of Peter Hain. Such a result would probably be enough for a return to the Cabinet for him. Sadly, though, Brown's pledge to return the moral compass to the labour governement is already flagging.
MR D DOBBS, Finchley LONDON, UK
A simple suggestion in view of our MPs difficulties with funding their parties,their party elections ,their expenses and voting on their own pay.Let each candidate say on the voting paper what rate of pay he is asking for,for what rate of attendance;all other income to be declared on a monthly basis.Failure to declare leading to immediate dismissal,loss of salary and pension rights.
c adamson, quimper, france
Can't we just lock up all the cabinet for 42 days until we find a crimnal offence, or more important a suspected criminal offence, they can be prosecuted for?
Mmmmm, I don't know about the jury trial though....
Austin Tassletine, South West, UK
The resignation of Peter Hain is just the latest example of the attitude that seems to have overwhelmed all Labour Ministers in the last 10 years or so. They get promoted to positions of high office and then immediately get above themselves and become arrogant and self important thinking that they can do no wrong. How many of them have had to be dragged kicking and screaming down to reality. Very few have shown any humility or seem to realize that if they want the glory of high office than they must also take the blame when things go wrong.
I believe that Peter Hain is guilty of arrogance and self importance and nothing else. He at least has done the right thing by resigning and I hope others follow his example.
Reg Tripp, Alton, Hampshire
Why doesn't Brown throw the towel in? That's what 95% of the country wants (the other 5% being civil servants). If he won't then surely it's time for a vote of no confidence in this dishonest, incompetent and unwanted government so we can get rid of them once and for all?
Phil C, london, UK
This resignation is all very well but on past form the whitewash brush will do a bit of overtime and in six months time this odious man will be given a cushy job in Europe. How these MPs have the gal to refer to each other as Honorable is beyond me, I would have thought the gag reflex might prevent them from uttering the words.
FEF, Cheltenham, UK
Tears of sleaze, spin and manipulation under Blair will take years to wash out. When politicians think themselves above the law and are seen protecting their own interests and positions before their duties as elected representatives of the public, the system has broken down.
Sadly for Gordon Brown, who still appears to be a genuine person of integrity, he is suttounded by those who lived through ther Blair years and are, to some extent, tainted. Brown needs to be more circumspect, stamd back from the hurly burly and be more cautious in publicly maintaining hie confidence in others who, as in Hain's case, turn out to be Judases.
Rembo, Tayport, Fife
If Brown had any integtiry left he would call a general election without delay, apologise for not keeping manifesto promises to the public regarding a referendum on the 'Lisbon Constitution/Treaty', then resign.
Les, Southport, England (a country, not a state!)
He seems accident prone (or just plain inefficient?) - time to have a "cabinet coup"?
Gerry Watts, Hobart, Tasmania, Australia
About time someone resigned. These people have no shame and bluster their way through events that would have brought previous governments down. Bring back the days of truthfulness, morals and decent behaviour - hight time this "lying is fine" and refusal to accept responsibility culture has got to stop.
isobel, Ashford, Kent
I THOUGHT BROWN HAD FULL CONFIDENCE IN HAIN!
Yet another Labour fiasco.
Then we hear about MP's believing they should have their taxis funded at public expense - no question the the Revenue's late night rules!
This is descending into a farce - I doubt if the Inspector of taxes would accept Hain excuse for an omission - do these politicans consider them selves above the law?
William, Sevenoaks, UK
Brown continues to moan about such distractions and his yearning to get on with the business of running government, he will be doing so on the day he is kicked out of power.
wayne, huntingdon, cambridgeshire
I cannot help but feel a twinge sorry for Peter Hain who has probably no knowledge of any wrong doing. If the police enquiry brings about a similar result to that arrived at in the cash for peerages he's sure to be okay - unless he is used as a scapegoat for all enquiries into doubtful dealings at the top. The problem, here, is that, as in all these cases, someone is in the wrong committing unlawful acts and usually with impunity. Further, I wouldn't have thought that the police-force have enough officers to release to enquire into all potential cases of abuses of public office.
Rodney Barker, Gainsborough, Lincolnshire UK