AT the last General Election New Labour made a great deal of capital out of the allegations of sleaze which plagued Conservative ranks. It was swept to power on a promise to clean up the public's perception of politics and restore the values of transparency and openness.

The shadow of sleaze which hung over the Tory Party demonstrated that the funding of political parties was a matter of public concern and needed urgent review.

It was imperative that Britain grasped the issue before it spiralled out of control, before we followed the United States model where party finances rather than policies determine electoral success.

On the question of finances, parties should be beyond reproach. Donations must not be allowed, or perceived, to buy influence. It is vital, therefore, that the identity of benefactors should be in the public domain.

On coming to office, Labour appeared to adhere to these essential principles. To its credit it not only undertook a review of guidelines, but also largely implemented the recommendations from the review.

But while its words on the subject have been worthy, its actions have been less so.

The Bernie Ecclestone affair tarnished its self-made holier-than-thou image.

And now its lamentable handling of the disclosure of Lord Hamlyn's £2m donation risks destroying that image.

How can a Government which crows about introducing legislation forcing the identification of major donors to political parties, then insist on anonymity? Hypocrisy is one appropriate summation. Sleaze is another.

Labour's defence that Lord Hamlyn insisted on anonymity does not hold up to scrutiny. If Labour was so keen on openness and transparency and Lord Hamlyn was so adamant on secrecy then it should have refused his kind offer.

Its defence that Lord Hamlyn's donation came in before the February 16 deadline for disclosure is even less convincing.

A party and Government pursuing transparency would have stuck to the spirit as well as the letter of the law.

By not voluntarily revealing his identity, Labour appeared to be prepared to jettison its principles just to get its hands on a much-needed £2m a few weeks ahead of the General Election.

This Government will find it difficult to shift public perception that, like its Tory predecessor, it is not averse to reverting to sleaze when the need arises.