Peter Hain has resigned from the government after the Electoral Commission asked the police to investigate his failure to declare more than £100,000 in donations to his campaign for Deputy Leader of the Labour party.

In a short statement he said he was leaving to “clear his name.”

As Work and Pensions Secretary he was in charge of the biggest spending department in the government.

He was also Secretary of State for Wales.

In a statement issued today the Electoral Commission said:

“On 29 November 2007, Peter Hain MP informed the Electoral Commission that he had not fully reported to the Commission donations he had received for his Labour Party deputy leadership campaign.

“Mr Hain has since met with the Commission and provided additional information about donations he received. The Electoral Commission has undertaken a thorough review of this information.

“Following discussions with the Metropolitan Police Service and the Crown Prosecution Service, the Electoral Commission has now referred matters to the Metropolitan Police for them to consider whether an investigation should commence.”

Mr Hain came fifth out of six candidates for his party’s deputy leader last June.

In 2006 while Secretary of State for Northern Ireland he used his powers to outlaw discrimination on the grounds of sexual orientation when accessing goods and services in the province, despite objections from local politicians.

He was nominated for the Stonewall Award for Politician of the Year in 2007 in recognition of his work for gay equality.

Mr Hain’s resignation is first from the government formed by Prime Minister Gordon Brown seven months ago.

During his campaign for Deputy Leader Mr Hain gave an interview to PinkNews.co.uk.