Alexander quits over scandal

By Matt Falloon

LONDON (Reuters) - A close ally of Prime Minister Gordon Brown and Labour's leader in the Scottish parliament quit on Saturday over a funding scandal.

Brown has stumbled from one crisis to another in the 12 months since succeeding Tony Blair, squandering a big lead in opinion polls over the opposition Conservatives.

His Labour party now faces a serious risk of defeat to the Conservatives in the next election due by May 2010. Brown's problems have included the collapse of mortgage lender Northern Rock, unpopular tax changes and an economic downturn.

Wendy Alexander, sister of International Development Secretary Douglas Alexander, said she would resign after a group of Scottish lawmakers recommended she should be banned from Scotland's parliament for one day.

Alexander, who has only been leader of the Labour party in the Scottish parliament since September, had failed to declare donations to her leadership campaign.

"I acted in good faith and on the written advice of parliamentary authorities. I believe there has been a breach of natural justice and a partisan decision," Alexander told reporters in Glasgow.

"(But) I judge that this issue has become too much of a distraction on the real issues that should dominate our public life. I cannot ask Labour supporters in Scotland further forbearance."

NIGHTMARE YEAR