Sir Keir Starmer has authorised an “urgent” review into the extent of foreign interference in British politics, as he prepares to change the law to tighten donation rules.

Ministers have initiated a rapid inquiry into current financial rules on donations and election safeguards, which will report at the end of March.

It will be led by Philip Rycroft, the former permanent secretary of the Brexit department.

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The inquiry is a direct response to the jailing of Nathan Gill, the former leader of Reform UK in Wales, who admitted accepting tens of thousands of pounds in cash to make pro-Russian statements to the media and European Parliament.

In this case, officers said that they believed some individuals had a direct link to Vladimir Putin.

Communities Secretary Steve Reed, who announced the inquiry to the Commons on Tuesday, wants Mr Rycroft to assess how well the rules work at the moment and promised the report will be published in full.

Mr Reed told MPs that the “conduct [of Gill] is a stain on our democracy”.

“The independent review will work to remove that stain,” he said.

The review could then lead to changes in the Elections Bill, due this spring, which could significantly change the way elections are financed.

Tuesday’s announcement is likely to ignite a firestorm of criticism.

Among the changes that could result from the Rycroft report could be a clampdown on cryptocurrency donations, which Reform UK leader Nigel Farage has said in the past would be a direct attack on his party.

It could introduce new rules for donations to thinktanks, which fall outside any regulatory regime at the moment, and could see new rules around foreign donations.

Foreign donors can effectively give money if they have a trading UK subsidiary at the moment.

The government has already promised to clamp down on “shell” companies, but this could give more clarity over how this will work.

It could also look at funding of “troll farms” – vast banks of social media accounts based overseas designed to try and sway public opinion as part of state disinformation campaigns.

However, the financial affairs of and donations to Labour MPs could be in the scope of the review, and those named in the report could face fresh disciplinary consequences.

The government also singled out Christine Lee, the UK-based lawyer accused of working covertly on behalf of the Chinese Communist Party, as another case of concern.

Nevertheless, other parties are likely to suggest this is an attempt to change the donation rules in Labour’s favour, after promising to lower the voting age to 16 and cancelling some mayoral elections because of a local government re-organisation.

The review will invite all party leaders to take part in “in-depth assessment of the current financial rules and safeguards and offer recommendations to further mitigate risks from foreign political interference”.

Mr Rycroft cannot compel politicians to give evidence, but he will have access to the security services, though the extent of their cooperation is unclear.

The conduct around the Brexit referendum has been specifically excluded in the terms of reference, and Mr Rycroft will be instructed to focus on more “recent” cases, although there is no specific start date.

The 12-week timeline for the inquiry, alongside the lack of statutory powers, is likely to make it hard for Mr Rycroft to uncover substantial new incidents of bribery or corruption and prove them to a standard necessary to put details in the public domain.

The publication date, at the end of March, comes just five weeks before local elections in which Reform UK is expected to do well, and opposition politicians are likely to question the timing.

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Mr Rycroft has previously locked horns with Boris Johnson.

He argued that, at times, Mr Johnson was a PM who “only speaks for England”, his government was “not sensitive to the niceties of constitutional convention” and had “imperious disregard” for devolved policies, fuelling the breakup of the UK.

In June last year, just before the election, when Rishi Sunak was PM, he signed a letter to The Times which said: “Trust in politics, and in the people and institutions of public life, is at an all-time low.

“This is a serious problem for the health of our democracy and is indicative of the need for substantial improvement in the governance of the UK.”

Mr Rycroft has previously expressed his caution about the relationship between big tech and politics, telling Sky News two years ago: “Politicians do have to be a little bit careful in this space.

“Nobody’s elected Elon Musk, his opinions are those of a businessman, he is not a statesman.

“Clearly, they can court business people for their investment, but they shouldn’t look as though they’re kowtowing to them in terms of their regulatory concepts.

“They should listen to their views, but it should be democratically elected politicians that take those really, really important decisions, and let’s hope that’s the case in the UK.”

It comes as Reform and the Conservatives both received significantly higher donations than Labour in the first three quarters of this year.

They included the largest ever political donation from a living person: £9m to Reform UK from British-Thai businessman Christopher Harborne.

Scotland’s justice secretary has survived a vote of no confidence amid claims she misrepresented a leading expert on grooming gangs and therefore misled parliament.

MSP Angela Constance has ignored calls to stand down and has First Minister John Swinney’s full backing in the wake of comments she made about Professor Alexis Jay.

Mr Swinney led her defence, describing her as a “sincere minister” who was “getting on with the job of making Scotland safer”.

Both Scottish Labour and the Scottish Conservatives lodged motions of no confidence, with a debate held at Holyrood on Tuesday afternoon.

Scottish Labour, the Scottish Tories and the Scottish Liberal Democrats joined forces to vote against Ms Constance, but the motion failed due to the backing of the SNP and Scottish Greens.

MSP Russell Findlay, leader of the Scottish Conservatives, said: “Shameless SNP and Green MSPs put partisan politics before truth and integrity, to the understandable fury of grooming gang victims.

“To any reasonable person, Angela Constance’s position is untenable. She misled parliament by misrepresenting Professor Jay, tried to cover it up and then publicly lied after being caught.

“She twisted Professor Jay’s words to reject our calls for a Scottish grooming gangs inquiry and then failed to correct the record.

“It’s an open-and-shut case of a ministerial code breach for which she should lose her job.”

The row revolves around a comment made by Ms Constance as MSPs debated the Victims, Witnesses and Justice Reform (Scotland) Bill in September.

Amid a failed Scottish Conservative amendment for a public inquiry to be established into grooming gangs in Scotland, Ms Constance insisted Professor Jay agreed with her that such a probe was not needed.

However, emails made public by the Scottish government last week revealed the professor – who led the Independent Inquiry into Child Sexual Exploitation in Rotherham in 2014 – later contacted Ms Constance to say she would “appreciate” her position “being clarified”.

Professor Jay added that her comments quoted by Ms Constance had “nothing to do” with the situation in Scotland.

Read more: Scottish government orders review of grooming gangs evidence

Scottish Labour leader Anas Sarwar said he supported the motion as “victims and survivors of grooming gangs and child sexual exploitation have lost confidence in this justice secretary”.

He added: “The justice secretary misrepresented Professor Jay’s views in order to find an excuse not to have an inquiry into grooming gangs.

“Victims and survivors should be able to rely on their justice system, and their government, to tell the truth, to act with integrity and to put them first.

“On this, the justice secretary has failed.”

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During First Minister’s Questions last week, Mr Swinney claimed Ms Constance “was making a general comment” on the situation as he gave his justice secretary his full backing.

He reiterated his support for Ms Constance during the debate, saying: “The cabinet secretary in the debate in September did not state that Professor Jay was speaking directly about the amendment.

“She made a general point drawing on the publicly stated views of Professor Jay.

“But I acknowledge that members of parliament and members of the public will draw different conclusions from the words we all use.”

Mr Swinney described Ms Constance as a “sincere minister who would never address parliament in a way that would in any way mislead parliament or the public”.

The first minister added: “She’s never shied away from asking tough questions about our approach to justice.

“Nor has she ever avoided tackling some of the biggest issues that we face.

“For these reasons, Angela Constance has my full confidence as justice secretary.

“She’s getting on with the job of making Scotland safer, and I urge members to enable her to continue doing that by rejecting this motion today.”

The motion was defeated by 57 votes to 67, with one abstention

US Senator Elizabeth Warren, one of the more outspoken voices against digital assets in Congress, is calling for answers from Justice Department and Treasury Department officials about a potential investigation into decentralized crypto exchanges, citing concerns over PancakeSwap and Uniswap. 

In a Monday letter to Treasury Secretary Scott Bessent and US Attorney General Pam Bondi, Warren asked whether their respective departments were “investigating significant national security risks posed by decentralized cryptocurrency exchanges like PancakeSwap.”

The Massachusetts senator raised concerns about “improper political influence” from the Trump administration over the selective enforcement of crypto companies and reports of money laundering tied to North Korea, asking for a response by Jan. 12.

“As Congress considers crypto market structure legislation—including rules to prevent terrorists, criminals, and rogue states from exploiting decentralized finance (DeFi) to fund their activities—it is critical to understand whether you are seriously investigating these risks,” Warren wrote to Bessent and Bondi, adding:

“The public deserves to know whether you are investigating the serious risks identified by national security experts and the crypto industry itself.”

Warren’s letter came as the US Senate prepared to wind down activities before the chamber broke for the holidays. Some Republicans on the Banking Committee had expected to address the digital market structure bill, known as the Responsible Financial Innovation Act, before the end of the year. However, Chair Tim Scott confirmed on Monday that a markup hearing on the legislation had been pushed to 2026.

Related: Top US Democrat signals fight over crypto market structure

The Massachusetts senator also raised concerns over reports that PancakeSwap had been “drumming up interest among traders to use coins issued by the Trump family’s main crypto company, World Liberty Financial.”

Some Senate Democrats have raised concerns about the US president’s potential influence and conflicts of interest regarding the legislation, given his and his family’s ties to the crypto industry.

XRP lawyer who challenged Warren in 2024 will run again

John Deaton, the lawyer who ran against Warren in the 2024 US election, is making another bid for Congress. Deaton has been an advocate for XRP (XRP) holders in court, emerging as a prominent figure in the cryptocurrency industry over the past few years.