A senior fundraiser for the Conservative Party resigned on Sunday after being secretly filmed offering exclusive access to Prime Minister David Cameron in return for donations of 250,000 pounds a year.
The disclosure is damaging for Cameron's party which has tried to shake off an image of being too close to the interests of business and the rich as Britain undergoes a strict austerity programme to cut its budget deficit.
The party's co-Treasurer Peter Cruddas stood down within hours of the Sunday Times newspaper publishing video of him telling undercover reporters, posing as international financiers, that the contributions would enable them to ask Cameron practically any question you want.
The Conservative Party said no donation had been accepted or formally considered and that it complied with electoral funding legislation.
The coalition government is facing a backlash after a budget last week that cut tax for top earners while freezing tax allowances for pensioners.
While there were also some tax cuts for lower earners, the budget went down badly with many Britons, giving the impression the government was looking after the wealthy and cared little for those suffering rising unemployment and falling incomes as the economy struggles to recover from recession.
The revelations ... prove that the problem is the ability of those with money to buy their way to the heart of government through political donations, Mark Adams, a Labour-supporting lobbyist who helped the Sunday Times with its investigation, told the paper.
The issue is embarrassing for Cameron, who promised before coming to power in May 2010 to curb corporate lobbying, saying it was the next big scandal waiting to happen.
The Labour Party, which has called for limits on the amounts wealthy individuals can give to political parties, called on Cameron to reveal what he knew about the matter.
The Sunday Times reporters had posed as Liechtenstein-based fund managers who wanted to develop contacts with Cameron and other ministers on behalf of their Middle East investors.
Cruddas told them the access would be awesome for your business, adding some of the party's bigger donors had enjoyed dinner with Cameron and his wife Samantha in their private apartment at his Number 10 Downing Street office.
He advised them that a donation of 100,000 pounds was a minimum but that 200,000 or 250,000 pounds was premier league.
With that kind of funding things will open up for you, he said. You do really pick up a lot of information.
When they met Cameron within that room, everything is confidential and you will be able to ask him practically any question that you want, he said.
He suggested they could even influence party policy, saying: If you are unhappy about something, we will listen to you and we will put it into the policy committee at Number 10.
The paper reported Cruddas as saying he was sure there were ways to work around it when told by the undercover reporters that the money came from a foreign wealth fund. Foreign donations are banned under British election law. He suggested they establish a subsidiary company in Britain, the paper said.
In a resignation statement, Cruddas, founder of London spread betting firm CMC Markets, said he had not consulted any politicians or senior party officials before meeting the bogus financiers and he denied that donors would have been able to influence policy or gain undue access to politicians.
I deeply regret any impression of impropriety arising from my bluster in that conversation, said Cruddas, himself a major donor to the Conservative Party.
Specifically, it was categorically not the case that I could offer, or that David Cameron would consider, any access as a result of a donation, he said.
But in order to make that clear beyond doubt, I have regrettably decided to resign with immediate effect.
(Editing by Janet Lawrence)