The scale of secret cash links between senior Conservatives and wealthy backers was revealed yesterday after George Osborne was told that he should have declared how his office was being funded. The Shadow Chancellor was the subject of a parliamentary investigation after it emerged that he failed to register almost £500,000 in donations. Donors had given the money to the Conservative Party but asked that it be used to bankroll Mr Osborne.

Ten other Shadow Cabinet ministers have also been benefiting from money channelled from Tory headquarters, the final report of the investigation said. In at least two cases the funding was from figures involved directly in the minister's policy areas.

The office of Grant Shapps, the Tory housing spokesman, is funded by donations from a number of mortgage brokers and Andrew Lansley, the Shadow Health Secretary, was bankrolled by a healthcare firm, the documents showed. Theresa Villiers, who has the transport brief but was previously Shadow Treasury Chief Secretary, benefited from donations by a number of investment bankers.

Mr Osborne said that the report by the Parliamentary Commissioner for Standards said that it would “not be fair or reasonable to criticise” him.

The Conservatives had sought official advice on whether the donations had to be logged with the Electoral Commission and the Register of MPs' Interests and “acted in good faith” in interpreting the guidance given, concluded John Lyon. It was “a story of misunderstandings, of discussions held at cross-purposes, of the misinterpretation of conversations and e-mails”.

Mr Osborne and other senior Conservatives thought — incorrectly — that because the money was used to support politicians' frontbench duties and not as MPs it did not have to be declared in the Commons register.

Lord Harris of Peckham, Sir John Beckwith, Serena Rothschild, Jeremy Isaac and Julian Schild were among those included on an internal “donors' wishes” list that led to the investigation into Mr Osborne. Mr Lyon said that all similar donations should be registered and he set a four-week deadline for entries to be corrected.

Hazel Blears, the Labour Communities Secretary, said: “George Osborne as the Shadow Chancellor is particularly vulnerable to charges of conflicts of interests given his role. The Shadow Cabinet must now publish at once the full details of all the secret Tory backers who have funded their offices.”

A spokeswoman for the Conservatives said that the funding for individual Shadow Cabinet ministers had been declared to the commissioner as soon as doubts were raised over the correct interpretation of the rules and before his formal ruling.

Correspondence reveals that some members of the Shadow Cabinet were aware of the identities of their benefactors while others were not.

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