A former Labour adviser arrested on suspicion of spying for China was a member of an elite circle of party donors, it has been revealed.

David Taylor is reported to have been part of Labour's 'Rose Network' who receive privileged access to the party's top figures.

He was arrested earlier this year by detectives from counter-terrorism police in London on suspicion of assisting a foreign intelligence service.

He is married to Labour MP Joani Reid, who was recently readmitted to the party following her voluntary suspension in the wake of her husband's arrest.

Mr Taylor and two other men have since been released on police bail, which in May was extended until this month.

According to The Telegraph, Mr Taylor was a member of the Rose Network until his Labour membership was suspended after his arrest.

Labour advertises the Rose Network as offering members the chance to attend a range of events, including presentations, discussions, receptions, and Q&A sessions.

These are said to include dinners and champagne receptions where members can mingle with Labour's front bench.

There are four levels of membership of the Rose Network, with members paying between £1,200 to more than £10,000 a year.

Labour boasts that its Rose Network has seen members donate tens of millions of pounds to the party's funds over the years.

Mr Taylor was a former special adviser to the Labour peer Peter Hain when Lord Hain was the secretary of state for Wales.

He has since been a lobbyist with a company called Earthcott, which has been listed as a supporter of a Labour business group, SME4Labour.

Mr Taylor also worked at the Asia House think tank, which promotes engagement between Asia and Europe.

A Labour spokesman said: 'All donations to the Labour Party are registered in accordance with Electoral Commission rules.

'David Taylor was immediately suspended from the Labour Party pending investigation, upon the police investigation coming to our attention.

'We cannot comment further while the police investigation is ongoing.'

Ms Reid, the MP for East Kilbride and Strathaven, was readmitted to Labour at the end of last month.

In a statement, she said she was 'excited to play a full part in supporting our new Prime Minister, Andy Burnham, his Government, and in renewing Scottish Labour'.

She added: 'I have never been part of a police investigation, as a suspect or as a witness, and I am pleased that this has now been recognised.

'The support I have received from colleagues across the political spectrum, my constituents and my local Labour Party has been steadfast.

'I am also deeply grateful to everyone who has stood by me when it was politically easier to distance themselves. You know who you are – thank you.'

The Labour spokesman added: 'The Labour Party expects the highest standards from our elected representatives and party members.

'The Party assesses any alleged breaches of such standards independently of the leadership and political interference.

'Following a process conducted under Labour Party rules, Joani Reid has been readmitted to the Labour Party and has had the Labour whip restored in the House of Commons.'