DANNY Alexander, Chief Secretary to the Treasury, is at the centre of a donations row after it was alleged a key member of Nick Clegg's inner circle accepted a potentially illegal gift for the Liberal Democrats.

In an undercover newspaper sting, it was reported that Ibrahim Taguri, the party's ex-chief fundraiser and an election candidate in London, sought a donation from an undercover reporter posing as an Indian businessman who was supposedly told he could donate money to the Lib Dems via a "cousin".

It was also claimed he was advised to spread gifts among other family members and even backdate a cheque to the party, enabling the true identity of the benefactor to be hidden in official records.

However, a Liberal Democrat spokesman said: "Danny has done nothing improper."

Reports said Mr Taguri earlier this month accepted a cheque on behalf of the party for more than £7500 from the "proxy donor" and the senior Lib Dem said the money would "open doors".

He then allegedly invited the undercover reporter to a fund-raising dinner and private meeting with Mr Alexander.

It was said that at that meeting the Highland MP encouraged the fake businessman to provide more financial help to the party but made clear he did not want to "intrude on the details" of his donations.

In private talks, Mr Alexander was quoted as saying how "very, very grateful" he was for what the fake businessman was doing for the party.

At another meeting, Mr Taguri was said to have told him that his donation and the promise of a further gift of up to £100,000 would "open doors" and that the party would be very grateful.

Mr Alexander's office was contacted for comment but there was no one available.

These latest claims follow the controversy over a fake business from China offering to pay for the advisory services of ex-Foreign Secretaries Sir Malcolm Rifkind and Jack Straw.

His SNP rival in his Highland constituency, Drew Hendry, said: "This an extremely serious issue. The people of Inverness, Nairn, Badenoch & Strathspey deserve full disclosure from Mr Alexander."