Sir Christopher Kelly, the chairman of the committee on standards in public life, called for reform of the rules on party funding to avoid damaging confidence in politics.
His comments came after four millionaire Tory donors received awards in the New Year honours list.
They included knighthoods for hedge fund tycoon Paul Ruddock and package holiday entrepreneur Doug Ellis, and CBEs for investment banker James Lupton and construction magnate James Wates.
Together they have given almost £1 million to the Conservative Party.
Two major Labour donors, Capita boss Rod Aldridge and the founder of online gambling firm bet365, Denise Coates, were also honoured at the weekend.
Sir Christopher said: “For as long as you can make political donations, when there is a coincidence between honours and donors you get this sort of story.”