ON THE Howard Hughes scale of anonymity, David Abrahams must be the most unsuccessful recluse of modern times. His name, his face, his employees and his connections with the national Labour party are now at the centre of a political firestorm that threatens to engulf the government. But in the northeast of England he has been a familiar figure in political life for 30 years.

The development was initially refused planning permission but is now set to go ahead after a government ban was lifted. That too will be investigated as the tentacles of scandal spread, but it seems like a planning decision will be one of the easiest things to explain about Labour's friend in the north.

David Abrahams broke cover in The Guardian to admit that mistakes were made over his £650,000 covert donations to the party he loves, but he claimed he was not aware that he risked breaking the law by channelling his largesse through his secretary, a builder and a lawyer friend.

"I have been raising money for the Labour Party through coffee mornings and jumble sales for the best part of 40 years, and in more recent times donating money - my own money - to Labour because I passionately believe in social justice and economic prosperity for all," he said.

Abrahams, who is 63 (although he sometimes claims to be younger), said he had acted in good faith out a desire for anonymity, not secrecy.

His intervention in print and his surprise appearance on Newsnight on Tuesday did nothing to dampen the flames of financial scandal and were slightly at odds with his previous assertions that he is a very private person. But then a strange picture has emerged of a man who combined reclusiveness with a long record of involvement in public life and a moth-like attraction to the Labour powerbase in the northeast of England.

As the son of Bennie Abrahams, the Lord Mayor of Newcastle in 1980-81, it should be hardly a surprise that he is known within Labour ranks. He inherited his property instincts and his status in the party from his father. He built up a property empire of rented houses across the northeast and found himself in a blaze of publicity when he was taken to the crown court accused of illegally evicting a tenant in 1992. He was cleared of all charges but singed by the publicity.

As a one-time Labour member of the now defunct Tyne and Wear council and a serving member of the party executive for the northwest, in the early 1990s Abrahams sought the nomination for the constituency Richmond, North Yorkshire. There followed one of the most bizarre sagas that attach to Abrahams when he became the first Labour candidate to face two deselection votes.

Abrahams won the nomination while claiming that a woman and boy who lived with him were his wife and son. The woman, Anthea Bailey, later said her appearance was a business arrangement and that she and her 11-year-old had been hired as a "family" for the election campaign.

Abrahams dismissed this as a smear, but after a bitter struggle against deselection stood down as candidate - though only after his party executive and officials all resigned in 1991. He remains single to this day, living in the modest house he inherited from his family, and has found his attempts to follow in his father's political footsteps into local government barred by the Labour party's regional powerbrokers.

But he immersed himself in a number of Labour organisations including Tyne and Wear Fabians, Labour Friends of Israel and the Campaign Against Pensioner Poverty. He chaired a Labour Party conference fringe meeting on care of the elderly, and at the Friends of Israel he became embroiled in an ideological row with Jon Mendelsohn, Gordon Brown's fundraiser.

Abrahams claimed Mendelsohn was well aware of the circumstances surrounding his donations. Mendelsohn has issued a flat denial that only adds irony to the effusive letter Abrahams received from Mendelsohn in his role as Gordon Brown's chief fundraiser, seeking a meeting and thanking him for all the support he gave the party over the years.

Mendelsohn surely hadn't forgotten his adversary because Abrahams is certainly remembered in London Labour circles. He would turn up at Fabian Society meetings in London in the early 1990s while Labour was in opposition and mix freely with backbenchers who would go on to become government ministers.

His business ventures do appear to have been mercurial and his current property empire includes dozens of retail and commercial premises - and the 200-hectare business park near Durham that could be worth up to £60 million.

John Brunton, Blair's election agent, never thought that Abrahams had any money at all. The shabby suits and the beaten up Volvo seems to have created an image of an eccentric millionaire.

Like many in the northeast political establishment, Brunton seems bemused by David Abrahams's emergence as a major donor to the Labour Party.

"He didn't dress smartly and he didn't have a flash car," said Brunton. "He was just connected to the Labour party in the northeast and that's how he came along to functions. No-one really knew him or anything about him."

The acquisition of the site for the Durham Green business park appeared to be a major property coup until its development was blocked by the Highways Agency in 2004. That decision was reversed in October last year and Abrahams has strongly denied any link between his political donations and the campaign to overturn the ban. Hazel Blears, communities minister, has had to pledge to investigate the circumstances over the government's change of heart.

The two people listed as directors of Durham Green Developments were the builder Ray Ruddick and secretary Janet Kidd, although Durham City Council says it was obvious from an early stage that Abrahams was the main figure behind the development, even though he was using the name David Martin.

Ruddick and Kidd, along with the unlikely figure of Jane Dunn, a life-long Conservative voter, and solicitor John McCarthy, were the intermediaries for Abrahams's donations to the Labour Party, which totalled almost £700,000 over four years.

No-one in the Labour Party in the northeast knew that Abrahams was worth that much but it emerged that he also made a £250,000 donation to Warick University this year to establish a chair in Middle East politics and may have given away £1 million in total.

Why then attempt to disguise his very substantial donations to the Labour party if Labour politics is in his blood and his business? "If people know you are wealthy, their behaviour towards you changes - often, perhaps through envy, for the worse," said Abrahams.

It may be that Abrahams simply enjoyed the delusion of wielding influence behind the scenes because there is no evidence that he gained personally from his donations to the Labour Party or that he was regarded by any of the northeast political establishment as anything but an eccentric.

Or it could be that he is, as one friend described him, an odd character with few friends who rubs people the wrong way.