Multi-million pound gifts from wealthy businessmen are a matter of pride, not embarrassment, for Labour, the Prime Minister insisted yesterday.

Tony Blair said Government legislation coming into effect in February would end worries over rich individuals buying political influence, by ensuring that details of all major donations are made public.

He told BBC1's Breakfast with Frost: "Providing the proper transparency and rules are there - and for the first time, we are actually introducing rules - we have got to recognise that it's not a bad thing, it's a good thing.

"I am proud of the fact that we have got successful entrepreneurs and disaffected Conservatives who look at the state of the Conservative Party and say, 'It is hopeless, it is incapable of governing the country properly' and support the Labour Party."

Recent £2m donations from publisher Lord Hamlyn, Science Minister Lord Sainsbury and former Tory donor Christopher Ondaatje have worried some Labour supporters, who fear the party is putting itself under too much obligation to a few individuals.

Union leader John Edmonds, of the GMB, yesterday added his voice to concerns expressed by respected figures within the Labour movement. Mr Edmonds said he found the gifts "troublesome", adding: "Sometimes it looks a bit tacky."

Mr Blair said he did not support a cap on donations, though he accepted it would be "odd" if too high a proportion of a party's income came from one source.

He also rejected state funding of parties. Public support did not exist for state aid to parties, and the idea was rejected by the independent Neill Committee inquiry into party funding, said Mr Blair.

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