Scotland's Conservatives have received a major boost to their Holyrood campaign, receiving £700,000 from their largest-ever fundraising event while Labour's coffers appear to have been hit by the cash for peerages controversy.

Figures from the quarterly update from the Electoral Commission also sparked a bitter clash between the SNP and Scottish Labour with the former highlighting how it received a healthy £550,518 in the last three months of 2006 while the latter accused the Nationalists of creative accountancy by pointing out £106,455 of this money came from the taxpayer.

Last September at the Glasgow Hilton Hotel, David Cameron attended a plush £2500-a-table fundraiser organised by Sir Jack Harvie, the Glasgow construction tycoon and philanthropist.

Speakers included Lord Forsyth, the former Conservative Scottish secretary, and local businesses were featured in an inch-thick 200-page glossy brochure crammed with advertisements from selling liqueur to foreign holiday rentals.

Ticket sales prior to the event raised £200,000 - an amount registered with the commission in the third quarter of 2006 - while subsequent sales and other spin-offs raised a further £500,000.

The Glasgow dinner, therefore, raised £700,000. It was attended by around 1000 people. Such was its importance, Mr Cameron, suffering badly with a flu bug, nonetheless travelled to Scotland to thank local businessmen for their generosity.

The vehicle behind the fundraiser is the Scottish Business Groups Focus on Scotland, which raised £225,000 in 2004. It is listed as an unincorporated association, similar to the Midlands Industrial Council, a group of businessmen in the Birmingham area, which came in for criticism from Labour last year because the vehicle allows members to remain anonymous.

Last night, Jacqui Smith, government chief whip, repeated the accusation, claiming Focus on Scotland showed the Tories were still reliant on "secret sources" and "shadowy organisations".

However, Sir Jack, 70, told The Herald there was no secrecy about the Scottish group, which to all intents and purposes, consisted of one man - Sir Jack himself. "My wife and my secretary help with the organisation," he explained.

Asked why then he needed to make Focus on Scotland an unincorporated association, he replied: "I set it up to keep things above board and accountable. I have to tell the Tory party everyone who attended the dinner. They wanted a full record to make sure there was no-one from out of the country. It's the 12th dinner I've done. It's all open."