'Wendy's been stitched up' – angry Labour MSPs accuse standards chief Dyer

Ms Alexander was reported to the procurator-fiscal last week for failing to declare donations to her leadership campaign – despite receiving advice in writing that she did not need to declare them.

Yesterday, furious Labour MSPs accused the commissioner, Jim Dyer, of a "stitch-up" and said this latest controversy over their leader's campaign donations had solidified support for her, rather than undermine her position.

Ms Alexander is still waiting for the result of an Electoral Commission investigation into her campaign finances.

She has admitted accepting an illegal donation of 950 from a Jersey-based businessman, but has insisted she has e-mails that clear her of any intentional wrongdoing.

It is understood the Electoral Commission will meet in London tomorrow and may consider Ms Alexander's case. If its members come to a conclusion, their judgment may be issued as early as Thursday.

While that investigation continues, Dr Dyer's decision to report Ms Alexander to the fiscal has infuriated Labour MSPs.

Ms Alexander approached the clerks to the Holyrood standards committee last year to ask whether she should declare donations to her leadership campaign in the register of members' interests. She was told she did not have to do so.

Dr Dyer then took advice from a QC, before deciding that Ms Alexander should have registered the donations, and he referred her to the fiscal.

Yesterday, Dr Dyer issued a statement clarifying his role and making it clear he was not connected in any way to the standards committee or its clerks, and had made his decision on the basis of independent legal advice.

But Michael MacMahon, the Labour MSP for Hamilton North and Bellshill, said: "The attitude among Labour MSPs has now changed; it is now seen as a campaign against Wendy, and we are not going to let her be sacrificed at the behest of Jim Dyer. There is a real hardening of attitudes. The more the SNP's Roseanna Cunningham comes out with her statements (saying Ms Alexander's position is untenable], the more we are determined to rally behind her."

He added: "Dyer is no favourite among Labour MSPs anyway, but this last action is so typical of him: he wants a piece of the action."

Malcolm Chisholm, a former minister and Labour MSP for Edinburgh North and Leith, said: "This is deeply unfair to Wendy, because she was only following the advice she was given by the clerks to the standards committee.

"I have always been a strong supporter of Wendy's, but I would think it has hardened attitudes in her defence, particularly if there was anyone who had any doubts before."

Another MSP, who wanted to remain anonymous, said he believed Ms Alexander had been the victim of a "stitch-up" and was being "victimised".

It is understood senior Labour figures in London are becoming exasperated by the length of time this affair has been allowed to drag on. Details of the illegal donation surfaced in November last year and were reported to the Electoral Commission at that time.

One source said the party leadership in London believed Ms Alexander should be given the chance to clear her name, but they were worried that the failure of the Electoral Commission to report by now was damaging Labour's prospects in Scotland.

Meanwhile, the SNP continued to put the pressure on. Ms Cunningham said yesterday: "The standards commissioner has taken the action he sees as appropriate in reporting the issue to the procurator-fiscal … it seems incredible that the Electoral Commission could do anything other than report it for criminal investigation, given that everyone agrees the law has been broken."

THIRD SPIN DOCTOR QUITS

WENDY Alexander's woes deepened last night when the Scottish Labour Party lost another spin doctor – the third to quit since she became leader last summer.

Tony McElroy, the head of communications, announced he was to join Tesco.

His departure is not connected to Ms Alexander's leadership problems, but his resignation could hardly have come at a worse time for the Scottish Labour leader, who is facing calls for her resignation over her campaign donations.

Mr McElroy is the third press adviser to leave the Scottish Labour Party since the election.

Brian Lironi, the former political editor of the Sunday Mail, was hired as a press spokesman for the parliamentary party but left, apparently after difficulties with Ms Alexander. Matthew Marr, another press spin doctor, then resigned after making a series of drunken outbursts, the most abusive of which were directed at the First Minister, during an awards evening in November.

Mr McElroy will leave the Labour Party after its annual Scottish conference at the end of next month.

He declined to comment on his departure last night, but a Labour source said: "He has gone to double his salary and get a life; you can't blame him."

Mr McElroy is going to a corporate affairs role at Tesco in Scotland.

His departure coincides with that of Lesley Quinn, the general secretary of the Scottish Labour Party, who is being replaced by Colin Smyth, a Labour Party official, at the end of next month.

EXPENSES CLAIMS 'MUST BE MORE OPEN'

MPs' expenses are to be opened up to more scrutiny, Michael Martin, the Speaker, pledged yesterday, in a bid to quell the furore surrounding payments to family members.

Mr Martin will chair high-level cross-party talks about reform proposals, including spot checks on claims in response to what he said were "deep concerns" among MPs on the issue.

The Speaker said that, while many MPs had privately expressed fears over random audits, there was a public interest in greater transparency. The proposals include one to allow the National Audit Office to check up to one in ten claims to ensure a legitimate use of public funds.

A six-strong committee is also likely to consider a register of MPs' Commons staff or even a ban on the recruitment of relatives to posts paid from the public purse.

It follows last week's ten-day expulsion from the Commons of Tory MP Derek Conway after he was censured by a watchdog for employing his student son, Freddie, as a researcher. He was expelled from the Conservative Party by David Cameron, the party leader, and announced he would not seek re-election.

Mr Martin said: "In the debate (on Mr Conway's suspension], several members expressed deep concerns about members' allowances. Similar anxiety about the audit system has been relayed to me privately. We must also take fully into account the public interest in transparency."

Ben Wallace, the former MSP and now a Tory MP, was first to break ranks with Westminster's secrecy by publishing his full expenses, including payments to his wife, Liza, who is his researcher. It is thought unlikely that many MPs will voluntarily follow his example.