Clegg embroiled in funding controversy

British Liberal Democrat Party leader Nick Clegg is today facing questions over his funding arrangements, after it emerged that a series of payments from party donors were made directly into his private bank account.

The revelation, in the Daily Telegraph, was one of a rash of front pages putting Clegg under intense scrutiny as he prepared for the second live TV debate of the British general election campaign.

The Daily Express branded Lib Dem immigration policies "crazy" and The Sun accused him of "wobbling", while the Daily Mail revived comments he made about Anglo-German relations in 2002 under the headline "Nick Clegg in Nazi Slur on Britain".

Liberal Democrats claimed their leader was being "smeared" in response to his success in threatening the dominance of the two biggest parties at Westminster.

A Lib Dem spokesman said: "We believe that a concerted effort at political smear is under way, but we are confident the public will see it for what it is - a kickback by vested interests against the prospect of change."

The Daily Telegraph revealed that three Lib Dem donors paid up to £250 (€287.61) a month into Mr Clegg's account before he became party leader.

Copies of Mr Clegg's personal bank statements submitted during 2006 to back up his expenses claims recorded "automated payments" from Ian Wright, a senior executive at drinks firm Diageo; Neil Sherlock, the head of public affairs at accountants KPMG; and Michael Young, a former gold-mining executive.

All three men confirmed that they had paid the money to help fund a member of staff for Mr Clegg's parliamentary office when he was Lib Dem home affairs spokesman.

A Liberal Democrat spokesman said: "The donations were properly made and declared and were used to fund part of the salary of an additional member of Nick Clegg's parliamentary staff.

"The Telegraph story is wrong in fact and we regard any implication of impropriety as unacceptable."

However a former chairman of the Committee on Standards in Public Life, Alistair Graham, told the Telegraph the arrangement appeared "irregular".

"Given that he's been very holier than thou about these things, it would seem he has some explaining to do to his party and the electorate," said Graham. "It would now make sense for someone independent to check these accounts".

Former independent MP Martin Bell, elected on an anti-sleaze ticket in 1997, said: "There are clearly questions to answer here. Nick Clegg needs to show us that this arrangement was all above board and legitimate."

Mr Clegg declared the payments in the Register of MPs' Interests in March 2006.

His entry reads: "From February 2006 I receive monthly contributions towards the salary of a member of staff in my parliamentary office from: Mr Michael Young, London (personal donation), Mr Neil Sherlock, Godalming (personal donation), Mr Ian Wright, Rutland (personal donation)."

Meanwhile, the Daily Mail reprinted comments from an article Mr Clegg wrote for The Guardian when he was an MEP.

"Watching Germany rise from its knees after the war and become a vastly more prosperous nation has not been easy on the febrile British psyche," Mr Clegg wrote.

"All nations have a cross to bear, and none more so than Germany with its memories of Nazism. But the British cross is more insidious still.

"A misplaced sense of superiority, sustained by delusions of grandeur and a tenacious obsession with the last war, is much harder to shake off. We need to be put back in our place."

A Lib Dem spokesman said: "Anyone who sees the article in full will realise that it was written in the context of an incident of anti-German prejudice.

"Nick Clegg remains against prejudice in any form."

The Conservative Party called on Mr Clegg to explain the funding arrangement reported in the Daily Telegraph.

Shadow Treasury minister Greg Hands said: "Nick Clegg must produce the paperwork to clear up some serious questions about these donations.

"Having raised the issue of expenses in the first TV debate, Nick Clegg cannot leave these questions unanswered."