Hain guilty of "serious breach" over donations

Former Work and Pensions Secretary Peter Hain announces his resignation outside the Department of Work and Pensions, in London January 24, 2008.

LONDON (Reuters) - Former minister Peter Hain was guilty of a "serious and substantial" breach of parliamentary rules for failing to declare political donations worth 100,000 pounds, the standards watchdog said on Thursday.

The former Work and Pensions Secretary must apologise in a personal statement to the House of Commons, parliament's Standards and Privileges Committee said in a report.

Hain resigned in January last year after police launched an inquiry into the funding of his unsuccessful campaign to become deputy leader of the Labour Party.

His resignation forced Prime Minister Gordon Brown to reshuffle his cabinet and reignited a long-running debate over party funding and ethics in politics.

After replacing Tony Blair in June 2007, Brown promised to restore public trust after years of corruption allegations and police inquiries into party funding.

"Mr Hain's failure to register donations on this scale is both serious and substantial," the watchdog said. "However, we accept that there was no intention to deceive and Mr Hain has already paid a high price for his omissions."

In December, prosecutors said Hain would face no criminal charges over the incident.

The Crown Prosecution Service said there was not enough evidence to charge Hain, a former anti-apartheid campaigner and union official who was first elected to parliament in 1991.

It was the third investigation into Labour funding in recent years, launched at a time when Brown's poll ratings were falling as he tried to cope with the growing financial crisis. The next election is due by May 2010.

Hain was investigated after he failed to report money given to his campaign team within the required 30 days.

In a statement, he said: "The Cabinet Secretary stated that I complied fully with the Ministerial Code, the Crown Prosecution Service exonerated me and now the parliamentary authorities have also accepted that the mistakes I made were honest mistakes.

"I have been asked to repeat my apology on the floor of the Commons, which I am happy to do."

(Reporting by Peter Griffiths and Tim Castle; Editing by Steve Addison)