Gordon Brown faced further embarrassment today after Tony Blair's former chief fund raiser Lord Levy accused the Prime Minister of knowing about the secret loans which led to "cash for honours" inquiry.

Lord Levy said it was "inconceivable" that Mr Brown was not aware that the party was receiving substantial sums in loans which were not declared to the Electoral Commission.

Lord Levy insisted that Mr Brown's central role in the 2005 general election campaign meant he must have known how the campaign was being funded.

He said: "The returns to the Electoral Commission are showing quite clearly where all the donations are coming from.

The Prime Minister has always denied that he knew anything of the £14 million loans to the party by wealthy supporters - an assertion he repeated last month in the House of Commons.