Labour has resumed a secret courtship of influential donors before new funding rules are introduced to cover the party from future sleaze allegations, The Times has learnt.

Labour fears being left behind by the Tories in building up their war chest to fund the next general election. Labour, now £20 million in debt, generated only £580,000 from individual donors in the last quarter of last year, while Tory fundraisers brought in £9.8 million over the same period.

Jon Mendelsohn, Mr Brown’s leading fundraiser, is inviting small businessmen as potential donors to a series of private dinners to mingle with Cabinet ministers. They have been told that they could help to shape the next Labour manifesto.

Mr Mendelsohn is one of a number of people who face police questions over donations totalling £600,000 by a property developer that were made through third parties in apparent breach of the law.

Q&A: secret donor scandal

Our Political Correspondent analyses the origins of the secret donor sleaze row and its potential implications

• Timeline: Labour's secret donor row

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BACKGROUND

• A walking paradox who gave £600,000

• Brown is made to play the fool in stage farce

• Jack Dromey declares he is victim of concealment

Related Links

• Meet the donors who dine at Labour’s top table

• Hard task of raising party cash

• Labour may have to risk public’s wrath

Some Labour backbenchers have expressed concern to The Times that the dinners could leave the party open to more sleaze allegations.

Mr Brown has yet to announce what safeguards he will introduce to cover the party against future allegations. He asked Lord McCluskey, a retired judge, and the former Bishop of Oxford, Lord Harries, to advise him on internal changes for declaring party donations to avoid a repeat of controversies such as the Abrahams “Donorgate” affair.

One such fundraising event took place at a London hotel last Tuesday. The Times was at the hotel.

Ed Balls, Mr Brown’s close aide and Shaun Woodward, the millionaire minister, met at least nine backers. Guests were sent invitations to the second of such events from Mr Mendelsohn two months ago.

The reason for the meetings, he wrote, was because “the Government is mid-term and in the process of preparing and planning for the next general election” and would appreciate an opportunity to “discuss ideas and campaign proposals”.

One backbencher, Ian Gibson, MP for Norwich North, said: “I find it strange that we are still trying to get money from these sources without any discussion or proposals through the Party’s proper channels. It has led to problems before and here we are following the same route again.”

Last Tuesday’s dinner for 16 was held in a private room at Royal Horse-guards Hotel 150 yards from Downing Street. The Labour Party officials included Chris Lennie, the acting general secretary of the party, who hosted the event, and Mr Mendelsohn. Lord Sainsbury, the Party’s most generous ever donor, and Jon Aisbitt, the City hedge fund executive who gave £250,000 last year, were also present.

Less wealthy guests included Sonny Leong, who donated £2,000 to Alan Johnson’s deputy leader campaign, MT Rainey, an advertising executive, and Simon Fanshawe, the writer and comedian. Most of the guests had given less than £50,000 to Labour.

The first dinner was held at The Dorchester earlier this year. The guest of honour was David Miliband, the Foreign Secretary. One Labour insider said that the party had no choice but to try and attract smaller backers, having lost the interest of a number of big donors since Tony Blair left Government. “We are trying to bag these provincial businessmen while Cam-eron has the City bankers,” he said.

Donations to Labour fell to £581,000 between October and December last year – just a fifth of the £2.8million raised in the previous three months, according to the Electoral Commission. Blame has fallen upon the donorgate affair and Mr Brown’s failure to call the General Election in September.

The Tories generated £9.8million in the last three months of 2007 in donations. Their debts fell to £12.9million. Labour appears to be struggling to copy the Tories’ fundraising model. The party has wiped out £16 million worth of debt since 2006.

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