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Francis Maude is blaming Labour’s unwillingness to end their dependence on union money for the breakdown in talks:

“We are disappointed that the trade unions still hold Labour over a barrel.  The unions are running the Labour Party from the back seat, giving them control over Government policy.  Labour has rejected a comprehensive cap on donations and clearly do not want to end the big donor culture which has cause the ‘cash for honours’ scandal.  Labour just want a backroom deal that gives them taxpayers’ cash without proper reform. This would do nothing to restore public trust in our democracy.”

The First Post is now predicting that Brown will act unilaterally to close what Labour MPs in marginal seats regard as the "Ashcroft loophole".  Expect new curbs on the amount of money that can be spent between elections and not just at elections.  Ashcroft has defended his support for target seats by pointing to the huge advantages enjoyed by incumbent MPs from significant parliamentary allowances.

Related link: Union money to Labour, taxpayers’ money to unions

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