A former Labour official accused the party leadership yesterday of abandoning him over the proxy donations affair as the Crown Prosecution Service ruled that no charges would be brought against anyone involved.

Peter Watt, one of three former general secretaries caught up in the controversy over the £600,000 donations given to Labour by a property developer through intermediaries, said that the past 18 months had been a nightmare for him and his family.

Labour was taking legal advice last night on what to do with the £600,000 that has been sitting in a legally ring-fenced account gaining interest. It will be paid back to the proxies or Mr Abrahams “but we will not keep a penny”, a senior official said.

Mr Watt, who had worked for the party for 11 years, said: “When this matter involving contributions to the Labour Party became a story I was abandoned by the political leadership of the Labour Party without regard for the impact this would have on me and my family.

“I was resolute then and now in my belief of my innocence and that I had acted in good faith. I wish the same good faith and loyalty had been shown to me.”

The CPS said that there was insufficient evidence for any charges to be brought against three former general secretaries — Lord Triesman, Matthew Carter and Mr Watt — in relation to incorrectly declared donations. The CPS said that the property developer David Abrahams had never been a suspect. All those involved denied any wrongdoing.

Mr Abrahams, from northeast England, said that he had given the money using the names of associates, including his secretary and a builder, because of a desire for privacy.

Scotland Yard was called by the Electoral Commission in November 2007 and it handed its files to the CPS last June.

Under the Political Parties, Elections and Referendums Act 2000 people donating more than £5,000 must do so in their own names.

The three officials were, at various times, registered treasurers of the Labour Party and therefore respons-ible for taking reasonable steps to check the identity of donors.

The primary evidence for a prosecution were the Labour Party finance reports signed by the men, which identified the donors as someone other than Mr Abrahams, the CPS said. Inconsistencies in the evidence against the men meant that it would not have been possible to prove they knew where the money had come from.

Stephen O’Doherty, a reviewing lawyer at the CPS special crime division, said in a statement: “After taking advice from counsel and discussing the difficulties with the police I concluded that there was not a realistic prospect of securing a conviction.”

The Electoral Commission said the CPS had found that the donations register had been completed incorrectly but could not collate enough evidence to charge anybody with breaches of electoral law.

Mr Abrahams told The World at One on Radio 4 that he believed he had broken no laws and had simply been trying to protect his identity, because “it’s not my style to give donations in an ostentatious manner”.

He said that he was considering making further donations to the Labour Party. Labour said that future donations from Mr Abrahams would be a matter for the national executive.

Labour officials said that there was understanding for Mr Watt’s position after all that he had been through in the past 18 months. It was pointed out, however, that he had said he felt it right to resign at the time.

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