LABOUR'S national treasurer today said he believed people around the Prime Minister exploited loopholes in the law by raising cash for the party through loans rather than gifts.
Jack Dromey said it was wrong for the party which introduced laws requiring disclosure of donations to then seek ways of raising money secretly.
He urged the party to live up to its 1997 promise of a new, cleaner, style of politics.
And he backed the imposition of a cap limiting expenditure on General Election campaigns below the current levels, which he described as `dubious'.
Mr Dromey, the deputy general secretary of the TGWU, triggered the current row over loans to Labour when he revealed that £14m was lent last year without the knowledge of him or other elected members of the party's National Executive.
It later emerged that only Prime Minister Tony Blair, his personal fundraiser Lord Levy and the party's then general secretary, Matt Carter, knew of the loans.
Mr Dromey was asked why people around the Prime Minister asked for the money to be given as loans, not donations.
He said: "I can't answer that, because the system was set up in secret without my knowing about it or the elected executive knowing about it.
"As somebody who passionately believes in transparency, it was wrong to compel the exposure of donations, but then to exploit a loophole to obtain secret loans."
Asked if he believed the loophole was consciously exploited, he replied: "Yes."
Mr Dromey stressed no firm proof had yet emerged that peerages were traded for cash.
But he added: "There is the perception in the public mind of wrongdoing, there is the perception in the public mind of a culture built on cash for favours - and that is bad news.
"As somebody who believes in high standards in public life, I think what we need to do is to act once and for all to clean up the political system."