By Steve Bargeton, political editor

SCOTTISH LABOUR leader Wendy Alexander has escaped prosecution for accepting an illegal donation to her leadership campaign.

In November last year Labour admitted breaking the law by taking a £950 gift from a businessman not based in the UK.

But yesterday, in a controversial ruling, the Electoral Commission decided no action would be taken.

The commission—whose stated aim is to promote “integrity and public confidence in the UK’s democratic process”—admitted that Ms Alexander “did not take all reasonable steps” to comply with the law.

Nevertheless, it said it was “not in the public interest” to report the matter to the Crown Office and the procurator fiscal.

Under Section 56 of the Political Parties, Elections and Referendums Act 2000, it is an offence to accept and keep donations from someone not on the UK electoral register.

But the Electoral Commission said, “In respect of a possible offence under section 56, the commission has concluded that, while Wendy Alexander did not take all reasonable steps in seeking to comply with the relevant legislation, she did take significant steps.

“Having considered all the circumstances, the commission has decided that it is not appropriate or in the public interest to report this matter to the procurator fiscal.”

At a press conference at Holyrood, Ms Alexander said she had been cleared of intentional wrongdoing and made it clear she had no intention of resigning as Labour leader.

“I deeply regret that my campaign accepted a £950 donation which it transpired was in breach of the rules, and I apologise again to colleagues, to my party and the public.

“Personally, this has been both a salutary and bruising experience.”

But her political opponents took a different view.

SNP MSP Alex Neil said, “This is a total whitewash. The credibility of the Electoral Commission is totally down the drain.”

And Perth MSP Roseanna Cunningham described the outcome as “tantamount to a not-proven verdict when there has already been a guilty plea.”

The Electoral Commission investigation was prompted by the disclosure last November that Ms Alexander had received £950 from Paul Green, a Jersey-based businessman, for her leadership campaign last year.

When the issue came to light at Holyrood it was left to senior Labour MSP Tom McCabe to handle questions from the media.

At the time he was in no doubt that the law had been broken.

He said, “Yes, clearly at the moment there has been a breach of the law as it stands.”

Justifying their decision not to take the matter further the Electoral Commission did accept that Ms Alexander did take “significant steps” to comply with the law.

Yesterday she said, “Significant steps were taken to ensure compliance; it is however clear that our system of checks did fail, which I entirely accept. Lessons have and will be learned.

“As I have maintained from the outset, there was no intentional wrongdoing on my part and I have now been vindicated by the independent body charged with policing electoral law.”

Ms Alexander said she has no intention of standing down as Labour leader.

“I said that I would not walk away from the leadership of Labour in the Scottish Parliament,” she said.

Ms Alexander added, “I will not walk away from my party, or the people of Scotland, while there remains a job to be done in restoring social justice to the top of the political agenda, fighting poverty and making Scotland a fairer, more prosperous place for everyone to live in.”

However, Roseanna Cunningham was in no doubt that an offence had been committed.

“This sounds like a not- proven decision from the Electoral Commission, which is extraordinary given that Wendy Alexander’s campaign accepted an illegal donation, for which she even thanked Mr Green personally,” she said.

“An offence was clearly committed, and all the questions remain as to who exactly bears responsibility.

“Having been reported to the procurator fiscal earlier this week, Ms Alexander may have narrowly escaped being reported for a second offence, but the reality is that her leadership has been fundamentally weakened by this affair.

“It is very possible to argue that this is good news for the SNP, given Ms Alexander’s failed leadership of Labour in Scotland.

“But it cannot be good news in terms of the satisfactory investigation and enforcement of electoral law.”

Scottish Tory deputy leader Murdo Fraser said, “As recent events have shown, this was the least of Labour’s worries.

“Their handling of the budget was a complete and dismal failure.

“They were publicly humiliated and many within Labour’s own ranks are now questioning whether they are fit for purpose.”

He added, “Ultimately the Scottish public will cast their verdict.”