The Labour Party is to set up a new committee to vet future donations in the wake of the latest "cash for favours" rows.

The announcement comes after some Labour MPs criticised the party's decision to take �100,000 from adult magazine publisher Richard Desmond.

People should not expect that in giving money to the Labour Party they are getting some favour in return

Charles Clarke Labour chairman

Labour denies that episode has prompted the latest move but says it wants to cut out the "innuendo" which has surrounded recent gifts.

Tony Blair last week defended the decision to accept Mr Desmond's donation but admitted he would be glad never to have to raise party funds again.

The new six-member fundraising committee will oversee any gift of more than �5,000.

Democratic rights

Labour chairman Charles Clarke said the committee had been set up because of the constant innuendo of "wrong doing".

The party wanted to uphold the democratic right of people to give money to political parties, he said.

Appearing on BBC Radio 4's Today programme, Labour's general secretary David Triesman said the committee would robustly look at any prospective donation to ensure that it fell within electoral laws.

"The fundamental question is do people make money in a legal way," he added.

The Conservatives have called for an independent commission to examine claims of corruption in government.

Shadow cabinet office minister Tim Collins described this measure as "a very belated and inadequate admission by Labour that their fundraising is damaging their reputation and undermining public confidence".

"Labour have failed to address the fundamental conflicts of interest that remain at the heart of Whitehall - with Labour party fundraisers like Lord Levy still playing an active role in formulating government policy."

He said this was little more than "window dressing" following scandals and would do nothing to reassure a "sceptical public".

Richard Desmond publishes magazines like Horny Housewives

Labour fundraiser Lord Levy, Mr Blair's special envoy, is to be one of the members.

The committee will also include an independent member, Matthew Evans, chairman of publishers Faber and Faber.

The other members will be former Lords leader Baroness Jay, Mr Triesman and Margaret Prosser, from the Transport and General Workers' Union.

The move was decided at Tuesday's meeting of Labour's National Executive Committee (NEC).

Key tests

Mr Clarke told BBC Radio 4's PM programme on Tuesday: "The most important moral standard is that people should not expect that in giving money to the Labour Party they are getting some favour in return."

That included people looking for honours and government contracts, he said.

Mr Clarke said Labour was not going to draw up a list of types of organisations from whom it will not accept money.

Instead, the committee would decide on each donation on a case by case basis.

He declined to say whether the committee would have accepted Mr Desmond donation's.

The party continues to deny there was any conflict of interest in that or with any other donations.

Donor agreements

But Mr Clarke admitted Labour had been put on the "back foot" in recent rows.

Future donors will have to agree to a statement accepting they were not giving the money "for commercial advancement or advantage for themselves or others".

There has been some rank-and-file Labour unease about links with Mr Desmond, whose company owns magazines like Horny Housewives and Mega Boobs, as well as Express Newspapers.

In a Newsnight interview this month Mr Blair said he was not familiar with the content of the magazines owned by Mr Desmond's Northern and Shell company.

But if someone was fit to own one of Britain's biggest newspaper groups, there was no reason why Labour should not take their money, he said.

Mr Blair underlined measures Labour has taken to make party donations more transparent but said state funding would need cross-party consensus.