THE blocking of film star Sean Connery's knighthood and his #4800 monthly donations to the Scottish National Party were raised at a meeting in Edinburgh yesterday of the Neill Committee, examining the funding of political parties.

SNP vice convener for fundraising George Reid told the committee that the actor, who lives abroad, donated about #4800 a month to party coffers but insisted he was open about this.

Mr Reid said it had given rise to concerns within the SNP about discrimination when, under Labour, the actor had not received the knighthood for which he had been nominated by the Tories.

In his opening statement to the Committee on Standards in Public Life, SNP chief executive Mike Russell said the party favoured ''transparency'' over the publication of donations above an agreed threshold, but called for legal protection for those who donated to party funds and legislation to outlaw discrimination against them.

''Members of the committee will be aware of the disgraceful prejudice shown by New Labour against the actor and SNP supporter Sean Connery with regard to an honour. We believe that there is a real risk that similar prejudice would be applied to persons who were identified as SNP financial supporters.''

The SNP is proposing that an independent officer should, in exceptional circumstances, be able to give a donor continued anonymity.

Unlike the other parties, the Nationalists are not opposed to donations from overseas but told the committee they would not accept any from foreign governments. Labour and the Tories, they claimed, received massive cash support from south of the Border to contest Scottish elections. ''We see little difference in such support coming (at a time of globalisation) from London, Lisbon, or Los Angeles,'' said Mr Russell.

Scottish Labour and the SNP have been trying to score political points off each other on the issue of party funding for some time and their antagonism was obvious at the committee's hearing.

In written material, Labour accused the SNP of being the most secretive political party in Scotland. In his opening statement to the committee the party's new Scottish General Secretary Alex Rowley said: ''The Scottish Labour Party believes that the first step in the direction of reform must be the mandatory disclosure by the parties of their audited accounts and source and size of large donations. There can be no place for secret and furtive political parties in the new Scottish political scene.''

The party also published a detailed attack on the Nationalists, claiming that, when it came to disclosure of funding, they said one thing and did another.

Labour said it was the only party in Great Britain which opposed legislation to outlaw foreign funding and the only other parties in the UK which opposed the principle were the DUP and Sinn Fein.

Scottish Devolution Minister Henry McLeish told the committee that the Government had decided there should be no public funding of the organisations campaigning for and against the Scottish Parliament in the devolution referendum.

The Government, however, had funded an information campaign using various means to summarise the proposals and remind people about how and when to vote. He did not believe this should necessarily serve as a model for the future, but thought it had been right in the particular circumstances last year.

Lord Neill expressed the view on a number of occasions that it was ''unreal'' to expect the Government to be objective in such circumstances, as it had been publicly in favour of establishing a Scottish Parliament.

Scottish Conservative Party Chairman Raymond Robertson said it was the Tories' ''strong view'' that, if future referendums were to be fairly conducted, both sides of the argument should be heard.

The Scottish Liberal Democrats, unlike the other parties, support state funding and emphasised that it was needed for all elections and plebiscites. Party treasurer Dennis Sullivan told the committee that state funding should assist with research and administration, public information, publicity, and marketing and campaigning.

The committee will hear more evidence later today in Edinburgh from organisations involved in the devolution referendum and is expected to make its recommendations on the reform of party funding in the summer.