David Cameron has admitted hosting private meals at Downing Street and Chequers attended by people who have donated millions to the Conservative Party.
The Prime Minister was left facing demands for an independent inquiry into "cash for access" allegations after confirming the private meals.
The Tories released a list of 12 donors who were invited with their wives and partners to four dinners in Downing Street since Mr Cameron's election in 2010.
A second list of five donors invited for informal lunches at the PM's country residence Chequers was released later.
The Prime Minister stressed that he had never had dinner with anyone proposed by Peter Cruddas , the former Tory fundraiser forced to resign after being recorded offering meetings with Mr Cameron in return for donations.
"None of these dinners were fundraising dinners and none of these dinners were paid for by the taxpayer," he said. "I have known most of those attending for many years."
He added: "Peter Cruddas has never recommended anyone to come to dinner in my flat, nor has he been to dinner there himself."
The Prime Minister said Lord Gold, a lawyer and Tory peer, would carry out an investigation into the row, sparked by an expose in The Sunday Times.
After previously declining to reveal the names, Downing Street later published a list of big donors invited to dinner.
They include JCB boss Anthony Bamford, hedge fund boss Michael Hintze, Telegraph Media Group chief executive Murdoch Maclennan, and Lord John Sainsbury.
Tory co-chair Andrew Feldman, hedge fund chief Paul Ruddock, City financier Mike Farmer and Michael Freeman attended the same dinner.
Property tycoon David Rowland, banker Henry Angest, hedge fund boss Michael Farmer, Ian Taylor and spread betting firm owner Michael Spencer also dined with the Prime Minister. Most also brought their wives.
Mr Rowland and his wife also visited Chequers for lunch in August 2010 and businessman Fares Fares was there on November 7 that year.
Current of former Tory treasurers who have also dined with the Prime Minister at Chequers include Mr Spencer, Lord Ashcroft, Howard Leigh and party co-chairman Lord Feldman, the Tories revealed.
Deputy Prime Minister Nick Clegg also disclosed that he had lunch at his official residence of Chevening with Lib Dem donors including Richard Duncalf, Rumi Verjee, James Palumbo and Sudhir and Anita Choudrie.
Labour leader Ed Miliband has called for a full, independent inquiry into the claims by Mr Cruddas that "things will open up" for anybody willing to make large donations.
The Tory treasurer and fundraiser, himself a donor, urged undercover reporters posing as wealth fund executives to give more than £250,000 in return for direct contact with senior ministers.
He claimed those making "Premier League" donations could raise issues with ministers and feed their concerns into a Downing Street "policy committee".
Mr Cruddas resigned within hours of his claims being exposed by The Sunday Times and vehemently denied that party donors could in fact improperly influence ministers.
Mr Cameron said it was "completely unacceptable".
"This is not the way that we raise money in the Conservative Party, it shouldn't have happened," he said.
"It's quite right that Peter Cruddas has resigned. I will make sure there is a proper party inquiry to make sure this can't happen again."
Cabinet Office minister Francis Maude made a statement on the issue in the Commons and sought to reassure MPs that the issue was being properly handled.
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He and Mr Miliband traded barbs over which political party was responsible for the lack of progress to reform party funding.
The matter has been reported to the police who are considering an allegation made under the Political Parties, Elections and Referendums Act 2000.
But Mr Miliband insisted the allegations could not be "swept under the carpet" and said an independent investigation must establish "what influence sought, what influence was gained, and what impact it had".
Labour MP Michael Dugher told Sky News the idea the Tory party can investigate itself was a "complete joke".
He acknowledged all three major parties had had problems with "big money".
Sleaze watchdog Sir Christopher Kelly warned this example should not be seen as "an isolated event" and urged the parties to come good on their commitments to ending the "big donor culture".
Sir Christopher, chairman of the independent Committee on Standards in Public Life, said politicians should not be allowed to "duck" the issue of party funding any longer.
Several high-profile figures have waded in on the row, including News Corporation's Rupert Murdoch, who praised the scoop by the Sunday Times, one of his stable of papers.
Mr Murdoch, who also has a 39.1% stake in Sky News' parent company BSkyB, wrote on Twitter: "What was Cameron thinking? No one, rightly or wrongly, will believe his story."
He added: "Of course there must be a full independent inquiry on both sides. In great detail, and with consequences. Trust must be established. Without trust, democracy, and order will go."