An investigation by the Standards Board for England has found the action by Coun Ron Bell contravened the code of conduct for councillors, but has ruled out punishing him and said asking for donations "was not improper".

Coun Bell has already said he will appeal against the decision.

It was revealed last August that donations totalling £10,000 were made to the Blackpool South Conservative Association by Kensington Developments, which has applied to build 540 homes on Marton Moss.

The cash was channelled into an election war chest for Coun Bell, who is the Conservative candidate for the Blackpool South seat in Parliament.

The Standards Board report says Coun Bell failed to comply with the code of conduct when he did not declare "the existence and nature of his personal interest", which arose from his "close association" with Kensington Developments when the future of Marton Moss was discussed at a council meeting lasts March 18.

Following the first donation in 2008, Coun Bell arranged a meeting between Kensington and council representatives in April 2009 and, according to the report, "on May 7 2009 Coun Bell wrote inviting the company to make a further donation towards his campaign costs". A second £5,000 was handed over by Kensington, who said they may make a third donation before the general election.

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