Sir Hayden is reviewing funding

Sir Hayden Phillips has put Labour's proposal, of a �15m a year spending cap, to the other parties.

The Conservatives' position has also been put to other parties.

Sir Hayden's spokesman said they were seeking "an agreement, if possible by the end of January, in a situation where views remain divergent".

The spokesman said: "His own judgment on this issue will be made clear in the final report."

The Labour plan would allow parties to set their own rules for donations - allowing its links with unions to remain.

Prime Minister Tony Blair and Commons leader Jack Straw met Sir Hayden on Tuesday to discuss the plan, the BBC understands.

Limits

But the proposals have so far been rejected by the Conservatives.

The Tories have called for a large increase in state funding for all parties with more than two Commons seats, a cap of �50,000 on all donations, the phasing out of corporate donations - including from trade unions, and tax relief for donations.

Sir Hayden Phillips was asked by Tony Blair to examine whether agreement could be reached over changes to party funding.

It followed allegations, denied by all concerned, that honours have been given to people in return for people lending money to political parties.

An earlier memorandum from Sir Hayden, seen by the BBC last month, suggested a �500,000 limit on donations from organisations - including trade unions - falling to �50,000 in four years.

That plan got an angry reception within the Labour Party because of its impact on funding from unions.