THE Labour Party is considering a scheme which would use taxpayers' money to promote democracy in the community through events such as mock elections in schools.

The party's National Executive wants a debate on a Foundation for Democracy in a consultation on the future of party funding which is going out to local parties and members.

The document will help shape the party's response to Sir Hayden Phillips's review.

That was triggered by revelations that parties accepted secret loans worth millions from wealthy backers.

Some were then nominated for peerages, but blocked, sparking the cash for honours scandal.

The Foundation for Democracy would be independent but made up of "representatives from the parties and individuals from civic society who have an understanding of the political process and the parties," the document said.

The paper also calls for the Electoral Commission to be able to intervene swiftly over suspicious donations.