DAVID CAMERON authorised the repayment of £5 million in secret loans to unnamed Conservative Party supporters who objected to their identities being made public in the row over alleged loans for peerages.

The disclosure yesterday that the millions had been handed back in the past two weeks was criticised by opposition politicians who said it undermined the Tory leader’s pledge to bring transparency to the party’s source of funding.

In the past two weeks Lord Laidlaw, Scotland’s richest man, raised his loan from £2 million to £3.5 million to help Mr Cameron; but a conspicuous absentee from the list of big backers is Lord Harris of Peckham, the carpet magnate, who is worth £250 million and who was the most generous backer of Mr Cameron’s leadership campaign. He converted a £200,000 loan into a donation.

The Conservative Party leadership admitted last night that some of the returned loans had come from overseas. A senior party official said: “None of them had been nominated for a peerage and loans on commercial terms from abroad are permissible within the law.”

Mr Cameron assured the Electoral Commission that it will have private access to the details about the people behind the £5 million. The money was repaid from new loans and from a surge of £8 million in donations in the three months since Mr Cameron became leader. Conservative Central Office published the names yesterday of the 13 backers who were willing to be named, who had made £16 million loans.

The money was used for Michael Howard’s £18 million election campaign.

Francis Maude, the party chairman, issued a statement saying: “In the past few weeks a number of lenders have turned their loans into donations and their names will appear in the relevant returns to the Electoral Commission. We have also repaid around £5 million to lenders who did not wish their names to be disclosed.”

Lord Oakeshott of Seagrove Bay, the Liberal Democrat Treasury spokesman, said: “We do know one thing about them. They do not want us to know who they are.”

Mr Maude disclosed that the party had secured a £16 million loan from the Royal Bank of Scotland to help to acquire the freehold on Conservative Central Office, its headquarters since the 1950s, until it moved into rented offices two years ago. The party estimates that the building is worth about £30 million.

Mr Maude defended delaying publishing the names of its lenders for ten days after Labour revealed the 12 donors behind its £14 million of loans. “We believe it would have been wrong for us to reveal the identities of lenders without their permission,” he said.

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