Labour's chief fundraiser yesterday defended the controversial #1m donation to the party made by Formula 1 boss Bernie Ecclestone, but said lessons had been learned from the affair.

Music business millionaire Lord Levy said there had been ''no reason'' for alarm bells to have rung in Government about the gift because there was nothing improper about it.

Mr Ecclestone said yesterday in a letter to Lord Neill's Committee on Standards in Public Life, which is investigating the question of party political funding, that he made the donation, in January last year, after Tony Blair decided not to raise the top rate of income tax.

He also emphasised that although he welcomed the decision and had benefited from it, ''my donation was made because I was impressed with Mr Blair's leadership of the Labour Party and I wanted to reinforce his independence in a party substantially dependent on finance from trade unions''. He wrote after turning down an invitation to give evidence in person.

Lord Levy told Lord Neill's committee at a public hearing in London: ''Had there been effective and proper ground rules for all party fund-raising, with these recommendations in place, the (Ecclestone) matter would have been handled very differently, because I don't think there was any question of anything other than someone making a gift, and no judgment would have been made because of that gift.''