The Electoral Commission is to investigate the principle of parties using secret multi-million pound loans from rich benefactors to bankroll election campaigns.

It has emerged that the Conservatives have received a number of £1m-plus loans to fight this campaign.

Since 2000, the identities of all donors who give £5,000 or more are published, to counter sleaze allegations about party political funding.

But the identity of the Tory lenders can remain secret because they have charged an interest rate that is higher than the base rate but lower than those available from the banks.

Sam Younger, the commission's chairman, said: "The law does not currently require a loan made to a political party on commercial terms to be declared as a donation.

"However, given that the thrust of the legislation is to provide transparency, we will be reviewing this as part of our statutory report after the election."

Jonathan Marland, the Tory treasurer, said: "There is no transparency issue here. All the loans will be converted into donations and then the names of the lenders will be disclosed.

"We receive more favourable interest rates from our supporters than we would from the banks. It is good commercial practice."