THE Labour treasurer claimed last night that people around the Prime Minister had consciously sought to exploit loopholes in the law by raising cash for the party through loans rather than donations.

Jack Dromey said that it was “wrong” for the party — having legislated to require the disclosure of donations — to seek ways of raising money secretly. Mr Dromey sparked the row over loans to Labour last month when he revealed that £14 million had been lent last year without his knowledge or that of other elected members of the party’s ruling body.

Today backers of the city academies programme are calling on sponsors to hold their nerve in the face of accusations that honours were offered in return for money. Amid fears that plans for a new generation of trust schools could be damaged, they say in a letter to The Times that they will develop new ones and support existing ones “despite the sniping at the edges which is trying to denigrate this programme”.

Yesterday Lord Adonis, the Schools Minister, told the London Evening Standard that suspending plans for more independently run schools would be a “dereliction of our public duty”.

Appearing on BBC Radio 4’s Any Questions, which is repeated today, Mr Dromey was asked why those around Tony Blair had asked for loans, rather than donations. “I can’t answer that, because the system was set up in secret without my knowing about it or the elected NEC knowing about it,” he said. Asked if he believed a loophole had been “consciously” exploited, he replied: “Yes.” He emphasised that no “firm proof” had emerged that peerages were traded for cash.

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