THE Tories under David Cameron have accepted £100,000 from the wife of a foreign arms dealer barred from making political donations in Britain.

Wafic Said, a Syrian-born Saudi, and his British wife Rosemary are accused of exploiting a loophole in the rules to fund the Tories, who are under increasing pressure to reveal their financial backers.

According to a senior Conservative source, Said used to give donations to the Tories until he became a tax exile and foreign gifts were banned. His wife now bids at fundraising auctions, which friends say is his way of supporting the party.

Last month the Saids bid £100,000 for an eight-person dinner that will be provided by Albert Roux, the chef, at Cameron’s first fundraising ball. Nicholas Soames, the former shadow defence minister, and Boris Johnson, current higher education spokesman, were offered as wine waiters.

Over the past two years the Saids are understood to have given at least £550,000 to the Tories at auctions but none of it has been declared publicly.

A friend of Said’s said yesterday: “This is how he continues to support the party — by giving money through auctions.”

This weekend a spokesman for Cameron said the Tories had complied with the rules and received donations in the name of Said’s wife. The party says she is a long-term supporter.

Said has a colourful public profile. He was the middleman who profited from Britain’s biggest arms deal — “Al-Yamamah” — which involved the multi-billion-pound sale of fighters and warships to Saudi Arabia. The deal was signed by Margaret Thatcher, whose son Mark was said to have received payments for his involvement in the deal in the 1980s.

Said was also at the Ritz hotel in Paris in 1993 on a visit that eventually led to the fall of his friend Jonathan Aitken, a fellow guest, who was Tory minister for arms procurement. In addition Said has given £20m to Oxford University to build a business school.

Rosemary Said was raised in Britain but is said also to hold a Saudi passport. The couple met in the early 1960s and have been married almost 40 years.

The disclosure that Cameron is prepared to accept money from the Saids will add pressure on the Conservatives to reveal their financial backers.

Last week Tony Blair disclosed that Labour had secretly borrowed almost £14m from 12 businessmen. Four of the 12 were later nominated for peerages by the prime minister.

The Conservatives are understood to have borrowed £22m from backers but are refusing to reveal their identities. Several million pounds more have been raised through various forms of disguised donations, such as auctions in aid of the party.

The Electoral Commission, which monitors donations, has demanded the Tories reveal details of any non-commercial loans by Wednesday. It is understood the party may name some lenders, but not those who signed confidentiality agreements as a condition of the loan.

The Sunday Times has established that two of the five people nominated by the Tories for peerages in 2004 made secret loans to the party.

Leonard Steinberg, who owns a chain of betting shops, admitted yesterday through his spokesman that he lent the party money in 2004. Irvine Laidlaw, a Monaco-based businessman, has also made a long-term loan.

Another businessman, Michael Hintze, can now be named as the source of a £2.5m loan to the party. Hintze, an Australian hedge fund boss living in London, has also declared £110,930 of donations.

A senior Tory insider said the party had been receiving loans for more than a decade. At least 24 backers — those who have given as well as lent money — have been given peerages in this time, including Lord Ashcroft, Lord Kirkham and Lord Harris. Others thought to have made loans to the party include Henry Angest, an investment banker, Bernie Ecclestone, the Formula One racing tycoon, and Johan Eliasch, owner of the Head sports equipment firm.

Money is also thought to have been “loaned” by foreigners including John Latsis, the late Greek shipping tycoon.

The source, who negotiated some of the loans, said: “The party started doing loans years and years ago. If you look at the list of lenders you’d find quite a lot of them in the Lords.

“There were quite a lot who gave money to the party thinking they would get something. One or two very rich people started getting cynical and said, ‘I don’t want to give a donation if there is no guarantee’.

“The game was played — give us a loan or deposit some money in our bank so that we can draw against it with our overdraft. If you get your gong, convert the loan into a donation. If you don’t get your gong, withdraw it.”

Additional reporting: Holly Watt

Explore UK News

• Crime News

• Education News

• Health News

• Science News

• Scotland News

Times Recommends

• Everyone will get vaccine against swine flu
• Artificial sperm and the race to build a baby
• BBC jets out stars to tout for prizes