Union anger at tycoons' cash for Labour

Labour is facing a furious backlash from Left-wing MPs and the unions after it pocketed large donations from private equity tycoons.

The party accepted a total of £750,000 from Nigel Doughty, Sir Ronald Cohen, and Jonathan Aisbitt, records from funding watchdog the Electoral Commission are expected to show.

Last year they gave £250,000 each to Labour, which is facing a financial crisis.

But the donations have angered union leaders, who claim private equity investors are a multi-millionaire elite who close down businesses and sack their workers while receiving generous tax breaks.

Labour's deputy leadership contender Peter Hain said he had 'concerns' about asset-stripping.

But the Northern Ireland Secretary told BBC1's Sunday AM programme it was important to distinguish 'the good from the bad' and that he was happy for 'rich' people to continue donating to the party to 'keep us in power'.

GMB general secretary Paul Kenny called on Labour's National Executive Committee to investigate the donations.

He added: 'Only in the last few weeks the GMB's campaigning has put names and faces to the multi-millionaire elite who run the private equity industry and made clear what they do.

'Until that time most people in the Labour party will not have been clear about where this money was coming from.'

Mr Doughty, 49, is chairman of Doughty Hanson, a leading UK-based private equity firm. He has a personal fortune estimated at £120million. Mr Aisbitt is thought to be worth £98million. He is reportedly a director at hedge fund manager Man Group.

Sir Ronald is a leading supporter of Gordon Brown and started the private equity vehicle Apax with three friends in the 1970s. He is believed to be worth £260million.

A Labour Party spokesman said last night: 'All donations given to the Labour Party fully comply with guidelines laid down by the Electoral Commission.'

Shadow Chancellor George Osborne said it was a 'mistake' to describe all private equity investors as asset strippers.