Fallout from property developer Davind Abrahams Labour donations engulfed Harriet Harman, Labour’s chairman and deputy leader, who was fighting to save her job yesterday as a party funding scandal engulfed the government and plunged the party’s MPs into despair. Financial Times, The Times, Daily Telegraph

Several ministers and former ministers were drawn into the scandal, but Harman, who accepted money from a woman acting as a front for Abrahams to fund her deputy leadership bid, was left especially exposed.

Brown ordered Labour to return more than £600,000 of Abrahams’s donations, saying it was 'not lawfully declared'. The property developer paid the cash through four intermediaries, in breach of electoral law.

The prime minister said the practice had started in 2003, describing it as 'completely unacceptable”. The affair has forced the resignation of Peter Watt, Labour’s general secretary.