Betting magnates are big Labour donors

Tony Blair faces fresh criticism of Labour's links to wealthy businessmen after it emerged that betting magnates who could gain from the Government's review of gambling laws donated cash to the party.

Peter Coates, the owner of the sixth largest privately owned betting company in Britain – Provincial Racing – and a director of bet365, the internet and telephone betting arm of a chain of bookmakers, is a Labour donor.

In 1999, he gave the party £100,000 and he has also made donations via companies that he controls – Lindley Catering Investments in 1998, 2000 and 2001, and Sprintinca in June 1999. Those are thought to have totalled £50,000.

Another Labour donor is Citigrove Leisure plc. The London-based property company donated £2,500 to the party each year since 1995, and £5,000 in both 1999 and 2000.

Citigrove was involved in an abandoned attempt to redevelop the King Alfred Leisure Centre in Hove, East Sussex, into a £30m multiplex cinema, with restaurants, a casino and a nightclub.

Last week, Labour announced plans for what has been dubbed a gambling "free-for-all".

The changes are a significant relaxation of the rules, which many believe could pave the way to Las Vegas-style gambling resorts opening in Britain.

Health campaigners say the Government's proposals could lead to an increase in gambling addiction and debt.

But the Government stands to make billions a year in tax, not to mention the huge profits that gambling bosses could rake in as a result of liberalisation.

Though there is no suggestion that either donor has been part of the lobbying process leading to last week's announcement, the links between New Labour and gambling firms has led to renewed calls for the system of funding for political parties to be revisited. Liberal Democrat MP Norman Baker, who has campaigned tirelessly against government "sleaze", said: "If the Labour Party is going to attract donations from across the board, then inevitably we are going to see policies emerging that could benefit one person or another. It does make the case for state funding of political parties yet again.

"These questions will continue to arise so long as there is this system of funding. There is a perception that Labour is for sale.

"It goes from Bernie Ecclestone, to the Hindujas and to Mr Mittal. It can look as though, if you give enough money to the Labour Party, you will get something in return, whether it's justified or not.

"There is nothing Mr Blair can say that will convince anyone otherwise. He's gone too far down the sleaze track to get back up."

Labour's general secretary, David Triesman, was last week again forced to repeat assurances that Labour policies were not for sale, stressing that trade union funding did not buy influence when it came to policy-making. That applied to big business, too, he said.

A spokesman for the GMB union hit back: "It is not trade unions that seek to buy favours through their donations; it is big business who seem to enjoy great success in exercising influence over government policy."