TONY BLAIR will come under massive pressure over Labour funding today after the party’s treasurer admitted there had been impropriety over secret loans from wealthy donors.

In an astonishing twist to the cash-for-peerages scandal, Jack Dromey said that the loans had been secured behind the backs of the elected officers of the Labour Party.

Directly embroiling in the affair the Prime Minister, who will face the media at his Downing Street press conference today, Mr Dromey said he would question Mr Blair if necessary to get to the bottom of what happened. He told Channel 4 News that No 10 had not “sufficiently respected” the Labour Party. He agreed that Downing Street must have known about the loans. “The Labour Party, its institutions, its democracy, needs to be respected, including by No 10, ” he said.

Asked whether he would question Mr Blair, he replied: “Whoever I need to talk to to get to the bottom of this, I will do precisely that.”

Mr Dromey is believed to have been angered by revelations in The Times this week that Lord Levy, Mr Blair’s long-time friend and fundraiser, had been the go-between in arranging loans from individuals who were subsequently offered peerages.

Mr Dromey, the husband of Harriet Harman, the Minister for Constitutional Affairs, further embarrased No 10 by announcing an internal inquiry into the loans. Downing Street sources insisted that nothing illegal had happened and that the rules had been followed but Lord Levy’s position will be in doubt today and it seems likely that the Electoral Commission will demand an explanation.

Mr Dromey, a strong supporter of Gordon Brown, also called on the commission to investigate the whole issue of political parties accepting loans, saying that it was now a matter of public interest. He said: “I don’t believe there has been any illegality. What there has been is impropriety. I do not think it is right that loans should be secured from wealthy individuals behind the backs of the elected officers of the Labour Party.”

Later, Mr Dromey told BBC Radio 5 Live: “I have no idea about the loans that were obtained in secret and that is absolutely wrong. I want to ensure that this never, ever happens again. Neither the chairman nor myself, the treasurer, knew anything about what was going on in respect of these loans.”

Asked who was responsible and whether the Prime Minister was responsible, he replied: “I don’t know. What I do know is that large numbers of loans were obtained and we are looking into the details of this now.”

Mr Dromey said that he had not seen any evidence to suggest that the loans were given in exchange for peerages.

He will conduct an investigation with Peter Watt, the newly elected Labour Party general secretary, into why the loans were kept secret. He will report to the party’s ruling National Executive Committee next Tuesday.

Mr Dromey said that he would also overhaul the existing fundraising regime to ensure that elected officers would not be left out of the loop. “I strongly believe in high standards in public life,” he said. “It was the Labour Party that campaigned in opposition for action to ensure there was the necessary transparency as part of the clean up of politics.”

Labour sources told The Times last night that Downing Street officials, Ian McCartney, the chairman, and Matt Carter, the former general secretary, had known about the loans.

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