FIRST Minister Alex Salmond has called for a ban on money raised outside Scotland from being used in Holyrood elections. The SNP leader wants all political parties to sign a voluntary code which would end the practice of cash being transferred from their London headquarters.

He also believes the restriction should apply to leadership campaigns run by Holyrood politicians.

The call comes as Wendy Alexander is put under pressure to resign after accepting illegal money to fund her Labour leadership campaign.

Salmond believes this is an opportunity to clean up politics. He wants all Scottish political parties to sign up to a scheme whereby cash spent on Holyrood elections is raised exclusively in Scotland.

Currently, the Liberal Democrats, Labour and the Tories all receive "transfers" from the London headquarters of their UK parties for Holyrood and Westminster elections.

The first minister believes the practice should be allowed to continue for Westminster campaigns, but not for Holyrood.

"Scottish elections at Holyrood should be financed by permissible donors in Scotland," he said.

A source close to Salmond also said there was a case for applying the new rule to leadership campaigns undertaken by Holyrood politicians. Alexander is currently fighting for her job after taking cash from a Jersey-based tax exile.

The SNP believe the issue could be discussed at a cross-party summit, while Salmond may also raise the matter with Scotland secretary Des Browne.

Electoral Commission figures show how Scottish Labour, in particular, is reliant on funding from England-based organisations. The largest chunk of the party's Holyrood election war chest came from Muslim Friends Of Labour, an organisation whose address is in London. Most of Scottish Labour's union funds also come from down south.

However, the SNP's proposal is unlikely to win much support from the opposition parties at Holyrood, as they will see it as a Nationalist attempt to close down a regular route of funding.