LONDON (Reuters) - A prominent financial backer and former treasurer of Prime Minister David Cameron's Conservative Party on Thursday said he had avoided tax as "everyone does", embarrassing the British leader less than three months before a close election.
The admission is a gift to the opposition Labour Party which has tried to cast Cameron and his party as privileging the interests of the wealthy and unfairly lowering their taxes, a charge Cameron denies.
Labour leader Ed Miliband, whose party is level or just ahead of Cameron's in many polls before the May 7 vote, on Wednesday accused the Conservatives of accepting donations from "dodgy" account holders of HSBC, whose Swiss arm is embroiled in a tax scandal.
Miliband also asked what Cameron planned to do about the tax avoidance activities of donor Stanley Fink, a British peer.
Fink said in a newspaper interview on Thursday he had objected to Miliband's use of the word "dodgy" rather than being accused of "tax avoidance". Tax avoidance is not illegal.
"The expression tax avoidance is so wide that everyone does tax avoidance at some level," Fink told the Evening Standard newspaper.
"What I did ... was at the vanilla, bland, end of the spectrum," he added, saying he had set up family trusts during four years working in Switzerland.
A spokesman for Cameron, who has boasted of his government's success in cracking down on tax evasion and avoidance, said: "The prime minister's view is that taxes that are due must be paid."
Labour's Miliband said Cameron should explain why he appointed a party treasurer who says everyone avoids tax, describing the admission as "a defining moment of Cameron's leadership of the Conservative Party".
Reporting by Kylie MacLellan; Editing by Andrew Osborn