The proposed party financing bill sets out a difference between anonymous donations, confidential donations and donations whose source is not made public, and the distinction - or lack thereof - between the first two is proving contentious, with the opposition describing the arrangement as a work-around.

In the original proposal, donations up to €500 would have been anonymous, while donations between €500 and €7,000 from the same source in any given year would have to be registered, but not made public.

Any higher donations would be made public, but no single source may donate more than €40,000 in a single year. The savings resulting from subsidised loans would also be considered as donations, and also subject to the same thresholds.

However, the Council of Europe's anti-corruption body GRECO strongly objected to the €500 upper limit to anonymous donation, and the threshold was brought down to €50 to satisfy its demands.

But a new category of "confidential" donations - from €50 to €500 - was introduced.

As this provision was discussed in the Consideration of Bills Committee, MPs as well as Alternattiva Demokratika deputy chairman Carmel Cacopardo questioned the distinction between the different categories, with Mr Cacopardo pointing out that all annual donations lower than €7,000 were confidential.

But as the discussion progressed, the distinction between anonymous and confidential donations proved to be more controversial.

Political parties would not be obliged to reveal confidential donations to the Electoral Commission - which is tasked with ensuring that they follow the law, with Attorney General Peter Grech later noting that the commission would only be allowed to scrutinise them if it had a reasonable suspicion of irregularities. Reporting requirements for confidential donations would also be less stringent than for higher ones.

Opposition MPs Chris Said and Claudio Grech both ended up questioning the need for confidential donations, with Mr Grech insisted that this was a work-around to ensure that donations higher than €50 could remain anonymous.

Ultimately, following interventions by committee chair Deborah Schembri and Justice Minister Owen Bonnici, a form of compromise was reached, with Mr Grech stating that he did not have a problem with confidential donations as long as it is made clear that political parties keep the relevant details to ensure the donors can be identified if need be.

Mr Grech then raised another issue, insisting that donations from foreign companies or individuals - later specifying that this would exclude foreign nationals who may vote in local council or European Parliament elections in Malta - should be prohibited.

Dr Bonnici questioned whether this would breach the Constitution, but the Attorney-General then noted that the Foreign Interference Act already banned donations from foreign sources during general election campaigns, as well as donations from foreigners who fall under the definition of "alien" in any other circumstance.

Mr Grech also highlighted that foreign interests - as well as local individuals seeking to conceal themselves - could use trusts to make donations, ensuring their name would not appear. He questioned whether GRECO would be satisfied with a trust linked to the British Virgin Islands, for instance, donating €40,000 a year to a party.

He said that one must avoid a situation where organisations whose ultimate beneficiary is unclear end up bankrolling political parties.

The Attorney-General noted that in such circumstances, the provisions against anonymous donations may apply, but Mr Grech said that this should be clarified.

The MP then also said that he believed that the €40,000 cap on donations was too high. Citing the amount the PN and Labour claimed to have spent in the 2013 general election campaign, he said that just 18 individuals could finance both parties' campaign over a legislature.

Instead, he proposed a threshold of €40,000 over a rolling period of three years.