The new Home Secretary has been dragged into the growing scandal over £700,000 of hidden donations to the think-tank run by Sir Keir Starmer's right-hand man.

Leaked emails have revealed that Shabana Mahmood was involved in discussions over why the political funding watchdog was not told about huge amounts of cash being given to Morgan McSweeney's Labour Together group as required by law.

She and her fellow MP Steve Reed, now in charge of electoral law, are said to have believed the money was being kept hidden from the Electoral Commission to protect a Jewish donor at a time when anti-Semitism was rife within Labour.

Last night the Tories – who called on the Electoral Commission to open a new investigation into the case and refer it to the police – said Ms Mahmood should come clean over what she knew about the alleged cover-up, given her department is responsible for law-enforcement agencies.

Shadow Home Secretary Chris Philp told the Daily Mail: 'There looks to be a clear attempt to mislead the Electoral Commission by the Prime Minister's chief of staff.