Interview with Jack Straw

The new Commons leader said he was trying to "broker a deal" between the parties on issues such as new limits on donations and increased state funding.

His comments came as police probed claims that peerages were offered in return for loans and donations.

Mr Straw also revealed he had been moved earlier than expected from his former post of foreign secretary.

'Selfless contribution'

In his new role, he is considering whether there should be stricter limits on parties' spending at elections - and new limits on spending between polls.

He told BBC Radio 4's Today programme more state funding of political parties might also be needed and stressed the need to raise public trust in politicians.

"What we have to get across is that funding political parties, making donations to political parties, is something which is not only respectable but ought to be celebrated not in order that it purchases any influence but that it is a selfless contribution to the functioning of our democracy," he said.

We have already identified a number of issues that merit further detailed examination John Yates Scotland Yard Deputy Assistant Commissioner MPs asked to delay probe

Mr Straw said political parties were the best way of offering voters choice at elections and of securing effective government - and they did need funding.

The Conservatives say the trade unions should be included if there are new limits on donations.

Mr Straw said he did not think "for a second" that trade unions should be banned from giving money to political causes but there were questions about how it was regulated.

He stressed that unions already had to ballot their members regularly on whether they wanted to support the Labour Party.

Former civil servant Sir Hayden Phillips is reviewing the current system for the government.

Mr Straw told The Times newspaper: "All three parties want this settled before the next election."

Liberal Democrat spokesman David Heath said his party was keen to work with Mr Straw to clean up party funding.

Mr Heath added: "A sense of urgency needs to be injected into the search for a solution to House of Lords reform."

'Surprised'

He also told the paper he had revised his views on the Lords, and accepted the need for at least some peers to be elected in the future.

And he said he did not agree with ministers who believed that strengthening the power of Parliament meant weakening the government.

Mr Straw was demoted from foreign secretary in this month's Cabinet reshuffle.

He admitted being "surprised" by the timing of the move but said he had previously talked to Tony Blair about leaving the Foreign Office.

The pressures of being foreign secretary meant there had to come a time when he would not have to be always available for emergency calls, he argued.

"Having been home secretary for four years before that I'd been on duty day and night every day of the year, holidays, Christmas, Boxing Day, for nine years, and if you're going to do those jobs you have to be alert every second of the day," he said.

There have been suggestions that Mr Straw was moved because the American Government was annoyed he had called military action against Iran "inconceivable".

But Mr Straw said he did not think that was true.

He was not surprised about people jumping to conclusions but thought they were wrong.