The excuse we are expected to swallow by Peter Watt is that he made an innocent mistake, he didn’t realise that using intermediaries to make donations was illegal. We are implicitly expected to believe that he didn’t think that money laundering donations was unethical either.

Before Peter Watt became general-secretary of the Labour party he was the party’s director of finance and compliance, a position which made him directly responsible for making sure the Labour party acted within the law. He had to be familiar with the law, it was his job. Indeed we now know that he was emailed by Rachel Savage at the Electoral Commission in July and explicitly told

You have to give credit to Abrahams, he backed Harriet Harman for Deputy Leader with £5,000 through Janet Kidd, whilst giving another £5,000 to her rival contender Hilary Benn in his own name. Backing two horses in a race? Hardly shows a personal commitment, it is as if he is just throwing money at anyone in a potential position of influence. Why would he value their influence?

One of the key reasons given by Brownites for their long putsch against Blair was that Tony was resented by the activist base and traditional supporters. Some of the Labour base see Brown’s co-opting of the three Tory “useful idiots” as clever politicking, but many others are uneasy. The symbolism of Thatcher back in No. 10 has proved too much for many. With his tough stance on public-sector pay plus his PFI’ing of the NHS and schools many socialists are wondering if they haven’t got another right-winger in Downing Street.

Even Brownite media stalwarts like Kevin Maguire are choking on the latest Thatcherite symbolism – “The sight of her in Downing Street still turns my stomach after all these years…. It was a calculated political gamble by Mr Brown. But for a Labour PM to flaunt a Rusty Lady despised, yes despised, with good reason by Labour voters is provocative political transvestism… gut reactions still count in politics, with many Labour folk wanting to throw up.”

The GMB’s Paul Kenny reckons “This is a huge mistake which will cost Labour credibility with their voters and communities up and down the land that still bear scars of the damage she caused.” John McDonnell MP says “It is hard to imagine a greater insult to the Labour and Trade Union movement.” “Don’t forget misery Thatcher caused” rants the Mirror’s political editor Oonagh Blackman at Gordon.

Activists on LabourHome are reflective but not impressed. “Personally I’d much prefer the Government to actually start making some fundamental policy decisions instead of being in permanent campaign mode. It’s all very well having a so-called ‘big tent’ but what’s the end game?” Others complain “there does have to come a point when he stops trying to woo the right-wing and comes up with some solid policies.”

“It’s all very well inviting Thatcher around and recruiting Tory MP’s/Lib Dem MPs to head task forces. Not actually sure how it’s a vote winner down my local pub?” One disaffected activist sums up the feeling of many about Brown treating with Thatcher: “Disgusting. Insulting. He just lost us thousands of votes from Labour supporters.”

Political transvestism may seem like clever politics in Westminster, but it doesn’t go down so well with the people who got rid of Tony Blair and want Labour to return to its roots.

UPDATE : Tribune has an editorial attacking Brown.

Iain is being a little unfair on the blessed Ruth citing her as potentially Labour’s Most Incompetent Minister.

Firstly Mrs Balls (Yvette Cooper) deserves most of the opprobrium for the HIPs mess and there is a competitive field of choices in the ministerial incompetence stakes. Prezza has messed up more policies in his time than most. Hewitt is hardly the best of the bunch, Des Browne sends men to die for lack of equipment and lack of any comprehensible strategic or even credible tactical plan in Afghanistan.

Des Browne gets Guido’s vote, his incompetence is the most serious. It is wasting the lives of British soldiers…

Michael Green’s Tangent Communications has won the contract to rebuild the Labour Party website. Green backed Cameron’s leadership bid with a donation. How ironic…

John Reid has just told the BBC he is resigning when Blair goes in June. Guido wonders if he has given up on leading the Labour party or if he is positioning himself on the backbenches until after Labour’s general election defeat. He says he wants to stand down from frontline politics and “I think it’s a good thing to be able to go out to listen, to learn, to discuss, to get back to the grass roots.”

If you are standing down from frontline politics, why would want to get close to the grassroots? Has he really lost all ambition?

UPDATE : Fraser Nelson is reporting speculation that Brown offered Reid an effective demotion, so Heath-like, Reid flounced off. Let that be a warning to any who dare to stand up to the Dark Lord.

For Guido the best result of the night came from Lawrence Hill in Bristol, where the the photo-faking Busharat Ali lost to the LibDems. Despite some innovative other uses of the net – Bhangra campaign videos were, errrm, different.

His rather bad attempt at photoshopping a leaflet to show him at a place he was not, probably contributed to him not being on the council.

One good result on the night for the LibDems…