The SNP last night sought to drag the Scottish Labour Party further into the secret donor row by claiming that its 2007 Holyrood campaign was funded by "laundered and dodgy money" from David Abrahams, the millionaire businessman at the centre of the controversy.

The SNP last night sought to drag the Scottish Labour Party further into the secret donor row by claiming that its 2007 Holyrood campaign was funded by "laundered and dodgy money" from David Abrahams, the millionaire businessman at the centre of the controversy.

Angus Robertson, the Nationalist leader at Westminster, said Scottish Labour had raised around £167,000 for elections in the past four years but had spent nigh on £1m. Therefore, the Moray MP argued, central Labour funds had been spent, which must have included some of Mr Abrahams's gifted money.

"I firmly believe David Abrahams's laundered money helped the Scottish Labour Party's Scottish election campaign in 2007," said Mr Robertson.

"It's an outrage. Reform of party funding has now to be a priority. Powers over campaign finance should be devolved. Short of that, we should have arrangements, as they do in Canada, preventing the transfer of funds from federal to provincial level to run election campaigns."

Asked if he was sure the SNP had not been funded by proxy donations, Mr Robertson replied: "I am absolutely confident that the SNP has conducted its fund-raising and accounts completely within the law."

Earlier, during Scottish Questions in the Commons, Mr Robertson asked Des Browne, the Scottish Secretary, whether any of the "£326,955 of illegal donations" by Mr Abrahams had funded Labour's Scottish parliamentary campaigns in Scotland.

Mr Browne replied: "I can give you a categorical assurance, in terms of my state of knowledge, that none of those donations to the Labour Party, that have been figuring in the media over the last couple of days, went to fund any part of the Scottish elections, any part of the Scottish election campaign, to my knowledge."

David Mundell, for the Conservatives, asked Mr Browne, referring to Douglas Alexander, the International Development Secretary: "Doesn't this issue highlight the fact your predecessor should not have been at the same time both administering the elections and running the Labour Party campaign?"

Mr Browne insisted there had been no conflict of interest between Mr Alexander's role as the Secretary of State for Scotland and running Labour's campaign: "Everything that he did was completely transparent and above board."