The Treasury is a major obstacle to achieving state funding of political parties, a former minister has claimed.

In an interview with this website, Mike O'Brien said the Home Office lobbied hard for state funding legislation during the last parliament.

O'Brien says Jack Straw supported exploring ideas to "create mass political parties" by allowing everyone to tick a box on their tax form which would have allowed the state to pay at least £20 to the political party of their choice.

But he says that Gordon Brown's Treasury is hostile to funding party politics through taxation. "There is a view, in the Treasury, that people would rather their tax money be spent on the NHS rather than political parties," O'Brien said.

Pressure on Blair

The revelation that the government got close to introducing legislation for state funding will renew pressure on the prime minister to consider the move.

The former minister said he was a strong advocate of state funding at the time of the 1999 Electoral Commission and Party Funding Bill.

"As Minister responsible for the Bill I pushed quite hard for us to agree state funding of political parties. Jack Straw was willing to look at these ideas," he said.

"The method I proposed would have ended the situation where any political party has to go to big business for donations."

Sleaze claims

O'Brien, who was sacked from the Home Office following the election, says that the current funding system is "just asking for trouble".

"I think people will become increasingly disillusioned with politics and believe that all politicians are sleazy and up to their necks in it," he said.

Whilst several cabinet ministers, including John Prescott, are backing calls for state funding, the prime minister says he is not persuaded that the public or opposition parties support the move.

Iain Duncan Smith has set his face against the change - with Central Office sources saying he is reluctant to let Labour off the hook in the "cash for access" row.

Damage

But O'Brien fears that Labour's reputation could be seriously damaged unless Blair rethinks his stance.

"It's always much easier to say that questions must be asked and you must prove your innocence to politicians because the public is willing to believe the worst," he said.

"I think we're seeing that at the moment with some of the allegations over the vaccine issue. It is easy to make allegations. It is difficult to prove your innocence, particularly when things don't look so good."

But he insists that Labour has nothing to hide and blames the media for the current sleaze claims.

"I think people will become increasingly disillusioned with politics and believe that all politicians are sleazy and up to their necks in it. My experience with politicians is that by and large the allegations made against them are made by their opponents and the media," he said.

"The effect of all that is you get a perception among the public that politicians are all corrupt when by and large they are not."