The Sunday Times yesterday criticised the British Labour Party's acceptance of a $3 million donation from millionaire businessman and sometime Bermuda resident Christopher Ondaatje.

In its "Insight'' section, the paper describes the addition to the party's war chest for the pending election as exposing Labour to "charges of hypocrisy'' because it has criticised the Conservative Party's acceptance of similar donations.

Last week Labour published a list of donors which included the surprise donation by Mr. Ondaatje, who until recently had been a Conservative donor.

The paper claims the $3 million payment was made just before Christmas and "came from an account at the Hamilton branch of the Bank of Bermuda''.

"The revelation that one of its biggest donations has come from an offshore tax haven will expose Labour to charges of hypocrisy,'' the paper explains.

It claims Labour named Mr. Ondaatje as a benefactor "in a bid to contain the funding row'' which has broken out with the party failing to disclose at least six other large gifts.

The article continues: "However, the party failed to disclose that one of its 2 million gifts had come straight from Bermuda, which last year narrowly missed being put on an international blacklist of the worst tax avoidance regimes.

"Labour yesterday (Saturday) declined to say if it had known the money had come from Bermuda and said no rules had been broken,'' it concluded. "Labour has challenged the Tories to name their big donors.'' Mr. Onadaatje is a former owner of Cragmore, the $5 million dollar mansion on Pitt's Bay Road at the centre of the Tourism headquarters controversy last year. He has also been a major benefactor to the Bermuda National Gallery.

Mr. Ondaatje is a Sri Lanka-born British citizen who was once part of Canada's Olympic bobsleigh team. He made his fortune in finance and publishing and has grown disenchanted with the Tories.

"I passionately believe that Britain's interests would be best served by the re-election of a Labour government,'' he said in a statement. "I say this as a disillusioned former Conservative who sees a Conservative Party divided not just on Europe, but on the vital issue of the economy.'' Labour leaders came under fire from their own members this week over the handling of Lord Hamlyn's donation. Backbenchers, who in opposition savaged Conservative governments, said Labour should set an example of openness.

Furore over Labour cash "I am delighted that people of the stature of Christopher Ondaatje and Lord Sainsbury want to support the Labour Party in this way and have chosen to put their name in the public domain now,'' Labour Party chairwoman Maggie Jones said on Thursday.

Jones said Labour had led the debate on openness in party funding, while Conservatives had still not revealed how they paid for the 1997 elections in which Labour romped to victory.

And a Labour spokesman said there were no further party donors in the two-million-pound league, but would not say whether others had handed over seven-figure sums.

The naming of major donors -- which Labour hopes will answer charges that secret benefactors could buy government influence -- came just two days after millionaire publisher Lord Hamlyn was revealed as a "mystery donor'' of another two million pounds.

Both Labour and Conservatives are anxious to get their finances in a healthy state as they prepare for an expensive election campaign before a likely May 3 polling date.