Cameron's local party returned illegal gifts worth £7,400

David Cameron's constituency party returned £7,400 in illegal gifts shortly before the Labour donations scandal broke, it emerged yesterday.

The gifts to Witney Conservative Association - a holiday for auction, worth £1,500 from Geoffrey Dobbs, a Sri Lankan hotelier, and the successful bid, £5,900 from Roger Fletcher, based in Guernsey - were inadmissible because neither man was on the electoral register.

They were given on August 21 and returned on November 16, nine days before the Mail on Sunday's "donorgate" story was published.

The Conservatives rejected Labour implications that returning the gifts was a clearing exercise ahead of the newspaper's disclosures about donations from David Abrahams, the Tyneside businessman. While the Tories had been looking at two of Abrahams' proxy donors, Janet Kidd and Ray Ruddick, a spokesman said they had no idea the Mail on Sunday was working on the story.

"I can categorically state that we knew nothing about the Abrahams story until it appeared in the Mail on Sunday," the spokesman said. "As soon as we became aware that these two donations were not permissible we declared and voluntarily forfeited them to the Electoral Commission." The party had only discovered the mistake on November 15.

Cameron acknowledged at a press conference eight days later that Labour was not the only party to have problems. "All parties do make mistakes. There are innocent mistakes and there are mistakes of compliance. But Labour's mistakes are of a different order."

He said he was referring to a ruling by the parliamentary standards commissioner, Sir Philip Mawer, against him and 10 other MPs using the Commons for fundraising "patrons' clubs".

Yesterday John Mann, Labour MP for Bassetlaw, said: "We have heard Mr Cameron say someone who does not know what is going on in their party is not fit to lead the country. Presumably he believes that is even more true for someone who does not know what is going on in their own constituency office."

The row came as the Tories again rejected inter-party talks on new caps for spending and donations. The justice secretary, Jack Straw, instead held talks with the Liberal Democrats on Monday and with nationalist parties yesterday to seek cross-party consensus ahead of a green paper in the new year.

The Tories told Straw there was no point in meeting unless Labour agreed to a £50,000 annual cap on donations from unions. The Lib Dems have told Straw they will exempt affiliation fees if union members are clearly told they have the right to opt out of the political levy.

David Heath, for the Lib Dems, hoped Cameron would see the benefit in coming back to the table to negotiate a settlement "that is fair, transparent and sustainable".