THE GOVERNMENT has been forced to scrap a botched political donations rule which could have forced local councillors to miss vital meetings - or even stand down.

The regulations would have burdened business with masses of red tape, and stopped public sector employers and charities from releasing staff to serve on local authorities in work time.

Now Deputy Prime Minister John Prescott has promised to change the law by tabling an amendment to the Local Government Bill in the House of Commons.

He said: "It would be clearly wrong for some employers not to be able to

offer paid time-off to their employees to serve as councillors. We want to encourage people to stand."The problems stem from strict rules governing gifts or donations to

political parties introduced in February last year.

These forced political parties to declare any significant gifts and banned organisations such as public sector employers and charities from making donations.

After 18 months of confusion, the Electoral Commission has ruled that any paid time which employers allow staff to take to sit on local councils must be classed as a donation.

This would have forced them to keep a record of any time when staff were allowed to leave early, and make a formal declaration if it added up to a value of £1,000 or more.

This is the equivalent of 90 minutes a week for a person earning an average salary of £25,000.

In addition, the Commission ruled that people who work for organisations which are not allowed to make donations - including schools, hospitals and charities - are not allowed to accept time off.

This would have prevented them from attending council meetings in

work time, causing chaos as many councillors work in the public sector.

However, Mr Prescott has now changed the rules so that paid leave granted by employers no longer has to be classed as a political donation, so companies will be spared from keeping records.

Updated: 12:07 Friday, November 22, 2002