A senior Labour MP has called for the state funding of political parties as Downing Street faces renewed allegations of "sleaze".

Chairman of the Commons science select committee, Dr Ian Gibson, supports public funding for political parties as a means of breaking the damaging cycle of "cash for favours" stories following large individual of company donations to Labour.

"I for one would support [state funding], I think it is a good idea and it takes away these silly questions and we can get down to the real questions that are necessary," the Norwich North MP told the BBC.

Downing Street is facing renewed sleaze allegations following the award of a £32 million contract for smallpox vaccines.

The Department of Health gave a contract for the vaccines to PowderJect Pharmaceuticals.

And the company's owner, Paul Drayson, donated £50,000 to Labour in July 2001.

In the wake of the Ecclestone, Hinduja brother and Mittal rows, the Conservatives have called for an inquiry into the affair.

But despite the protests of rival companies, who say they were not allowed to bid for the contract, ministers have rejected allegations of any wrong-doing.

It is a situation that Gibson is to investigate.

"I'm trying to find out why one strain of the virus was used in this country as against the other strain in the United States.and to also ask about the tendering process, how that was carried out," he said.

"I would like to see that it (tendering) was open, that all the companies that can produce vaccines, particularly in this country, knew about it and were able to bid for it."

The government has dismissed claims of wrongdoing, health minister John Hutton said: "The reason why PowderJect was given the contract, as we've tried to make clear, was for one reason and one reason alone.

"They were the only company which could provide the type of vaccine we wanted as quickly as possible."

But opponents have maintained their criticism of the government.

Shadow Cabinet Office secretary Tim Collins called for an inquiry.

"This is bound to happen until we have a proper culture of openness and a proper mechanism where we don't have to take ministers' words for it," he said.

And Norman Baker of the Liberal Democrats said he was concerned that the contract had been won in "less than open circumstances".

Comparing the British government's attitude to that of the American administration's - where there was an open tendering process for more smallpox vaccines - he added: "We are not treated like adults in this country like in the US."

The row comes as International Automobile Federation (FIA) revives the Ecclestone affair with its planned publication of details of links between Labour and motor-sport's senior figures.

Racing bosses are out to prove that there was no deal to win an exemption from an ad ban in return for donations but the move is set to renew unpleasant memories of Labour first serious scandal.

Millbank was forced to hand back a £1 million donation to Formula One chief Bernie Ecclestone in 1997 after revelations that Tony Blair had held a Downing Street meeting with him just days before announcing that Formula One would be exempted from a tobacco advertising ban.

And even more embarrassingly for the government ahead of a tax rise budget, FIA official David Ward told The Times Ecclestone's donation was not linked to tobacco advertising, but was a mark of his approval for Labour's decision not to increase income tax for high earners.

"In contrast to the widely-held view that Ecclestone's donation was made to change policy on tobacco, in fact it was rewarding a policy decision he approved of, after it had been reported in the press," he told newspaper.