LONDON LETTER/Rachel Donnelly: Awkward questions are again being asked about Labour's big money donors. The suspicion, which began in the early days of the Blair government with the Formula One affair, that industry figures waive their chequebooks and eventually secure special treatment has been revived.
Not only did the scene of Labour's first scandal come back to haunt them this week with fresh claims about Number 10's involvement with the Formula One boss in 1997 but the question of state funding for political parties is back on the political agenda.
Mr Blair is reportedly unconvinced of the argument for state funding. But on Monday two of his most senior colleagues, the Deputy Prime Minister, Mr John Prescott, and the Home Secretary, Mr David Blunkett, gave state funding their support after what some commentators described as Labour's "damaging entanglement" with several business donors over the past few months.
The charge at Labour's door - that government contracts and favourable treatment for big business follows on from donations to the Labour Party - returned at the weekend after it was revealed that drugs company, Powderject, had won a contract to supply the NHS with 20 million smallpox vaccines following a £500,000 donation to Labour from Powderject's boss, Mr Paul Drayson.
The vaccines contract, worth £32 million, is set to make Mr Drayson's company a profit of up to £20 million but its main rival, Acambis, which produces the alternative smallpox vaccine, Dryvax, claimed it was not allowed to bid for the contract. Faced with accusations of favouritism and charges of contracts-for-donations, ministers repeatedly insisted that the government was guided by "national security" in opting for a closed bidding system and awarding the contract to Powderject.
Yet more problems emerged for Labour this week when The Times in London revisited the Formula One affair. It claimed that Mr Blair's chief of staff, Mr Jonathan Powell, took the initial steps to inquire whether Formula One boss Mr Bernie Ecclestone was willing to become a Labour donor prior to a government decision to exempt motor racing from an EU directive on banning tobacco sponsorship of sports.
In an attempt to remove the suspicion that Mr Ecclestone's £1 million donation - which Labour returned - was not designed to buy government influence, Mr David Ward of the international automobile federation, identified in The Times as Mr Powell's point of contact with Mr Ecclestone, came out fighting.
Mr Ward told The Times that the Ecclestone donation was not made in connection with the EU directive, which has now been dropped, but was a reward to Labour for not increasing the top rate of tax, which would have cost Ecclestone several million pounds. The tactic appeared to have worked and the story largely fizzled out but Formula One headlines revive bad memories for the Labour leadership.
Lord Levy, Mr Blair's unofficial fundraiser and envoy to the Middle East, also found himself defending his actions this week. Reports claimed Lord Levy - who raises the MPs ire because he does not have to answer questions in parliament as he is not a minister - received £250,000, more than previously recorded, from an Australian company seeking to build shopping centres in Britain. Lord Levy severed his connection to the company before new rules governing the registration of peers' interests came into force.
But one Labour MP told the Guardian that while he was sure Lord Levy had done nothing wrong, "he has become a symbol of what is not the right way to do things . . . in due course, I think he will step down".
It was against this backdrop that Mr Prescott admitted allegations of sleaze were "a problem" for Labour. Party funding is undoubtedly more transparent, but Mr Prescott declared: "I think the only system under which you can be properly accountable is state financing. "
Mr Blunkett, asked whether he supported state funding, said: "If people are going to ridicule anyone and suspect anyone who gives anything to political parties, you end up with the inevitable." Labour's problems over Formula One, Powderject and political infighting about Lord Levy are, by themselves, unlikely to propel the leadership toward state funding.
But with Labour voters recently declaring that the party was now sleazier than the Tories and one union leader suggesting many people believed the party was "up for sale to the highest bidder", Mr Blair could find it increasingly difficult to ignore the advantages of state funding.