Andy Burnham has denied taking cash for access from a foreign donor, after The Sun reported that an undercover journalist gave £5,000 to a businessman who later arranged for him to meet the Labour leadership candidate.
Faiz ul Rasool told a reporter, posing as a wealthy foreign donor, that Burnham needed money to fund his bid to succeed Ed Miliband as Labour leader and offered a face-to-face meeting in return for a cash gift.
The cash was handed over in £10 and £20 notes at the Playboy Casino in London.
Two days later, on Monday this week, The Sun said that the businessman invited its reporter to a function near Labour's London HQ, where he was introduced to the Leigh MP and his British wife handed over a cheque for a further £3,000 to a campaign aide.
But a spokesman for Burnham said that, while Rasool had previously donated money to his campaign, he had no role in his team.
A source in the Burnham camp said the leadership campaign had no knowledge of the £5,000 reportedly handed over in cash in a Mayfair casino.
Checks on the £3,000 donation established that it was impermissible, as it came from a foreign national, so the cheque was not cashed, said the spokesman.
"Faiz ul Rasool has had no role, formal or informal, within the Burnham campaign," said the spokesman.
"He made a donation in July of £5,000, which was declared in accordance with standard compliance rules.
"Mr Arshad was not invited to the reception held at campaign HQ on Monday evening and the event organisers were not notified that another guest was planning to bring him along. He asked for a photograph next to Andy, with people he claimed were his wife and baby.
"During the event, (the donor) Mr Arshad – who was not introduced under that name – presented an unsolicited cheque to a campaign staffer in the names of Mr A Ali and Miss N K Khan.
"Our routine due diligence threw up a number of discrepancies and as a result, the cheque was never cashed."
The spokesman said the Burnham campaign was writing to the Independent Press Standards Organisation about what he described as a "sting" involving hidden cameras and a baby.
Rasool has made significant donations to Labour in the past, and is chair of Muslim Friends of Labour and Labour Friends of Pakistan.
Burnham said on Twitter: 'Fully expected to have to contend with a lot of things in this contest but a tabloid sting involving a 9-month-old baby was not one of them."