CONTROVERSIAL new legislation that will curb corporate donations to political parties will also ban donations from trade unions, according to the minister for the environment John Gormley.

Gormley's made his surprise announcement at a Green Party meeting in Limerick yesterday and it will be seen as a direct attack on the Labour Party, which has a close association with the trade union movement.

"The legislation, which the Green Party will propose, will end not just corporate donations but also donations from trade unions. Is it really good for our society if the unions are hand-in-glove with the Labour Party and dictating policy?" said Gormley.

One of his party's achievements in the Renewed Programme for Government last autumn was securing a commitment on donations legislation. Last week, the party's Dublin Mid-West TD Paul Gogarty said that if the legislation was not agreed, it had the potential to be a coalition deal breaker.

He said his party would gladly "go to the country" if Fianna Fáil failed to agree to bring forward the legislation.

The issue could bring tensions between the coalition partners to a head in the autumn as Fianna Fáil backbencher Bobby Aylward has already warned that there is no need for change in the law.

Yesterday Gormley said, "Recent revelations about the fundraising activities of Fine Gael highlight once again the need for reform in this area. The inordinate influence of big business and wealthy individuals on legislation and government policies must come to an end.

"Why did we have light-touch regulation on the banking sector? Was it simply part of a trend in liberal capitalist countries like the USA, Britain and Ireland, or had it something to do with the donations the banks gave to the political parties? Yes, even the Labour Party took donations from the banks and did little while in power to curb the power of those banks.

"The Croke Park Agreement, which, extraordinarily, Labour did not publicly back because of a possible backlash from some of their donor unions, shows that public service reform is possible and indeed long overdue. If Labour had been in power it might never have happened."

A spokesman for the Labour Party said, "We don't really pay much attention to anything John Gormley says, he is a political irrelevance."

Gormley also announced plans to create a register of paid lobbyists to regulate their activities as their influence on politics was "pervasive and at times pernicious".