A prominent Midland businessman has been caught up in a row over the way peerages are awarded.

Robert Edmiston, who runs car importers IM Group in West Bromwich, is one of the businessmen whose nomination for the House of Lords has been blocked by the House of Lords Appointments Commission.

The controversy has prompted calls in the House of Commons for radical reform of the honours system by one Midland MP.

David Winnick (Lab Walsall North) said: "We could build on the progress that we have made so that the possible link between political donations and getting a peerage or knighthood would become weaker, not stronger. Some of us are rather worried about the current position."

Geoff Hoon, the Leader of the Commons, replied: "The Government have taken clear steps to improve the process of appointment, to make it transparent and to ensure that there is proper supervision of what happens."

Mr Edmiston, aged 59, is a committed Christian who has donated £250,000 to the Conservative Party and chairs the Midland Industrial Council, which has also donated six-figure sums to the Tories.

He also gave £27 million to charity Christian Vision, and has sponsored Grace city academy in Solihull.

Of the businessmen involved, he is the only one to be nominated for a peerage by the Conservatives. The others are all Labour nominees, who have made donations to Labour.

One of these, stockbroker Barry Townsley, has told Downing Street he no longer wishes to be considered for a peerage.

A spokesman for Mr Edmiston said: "He hasn't spoken to anybody, and he has no comment to make."

Traditionally, honours nominees are not supposed to discuss it until an announcement has been made by Downing Street and Buckingham Palace.

Negotiations between the Commission and Downing Street are continuing but Number 10 is said to be willing to consider jettisoning some of its nominations.

Mr Edmiston has also been at the centre of controversy because of his support for the Government's city academy's scheme.

As well the Solihull school, which already has Government backing, he plans to build a second Christian-based academy in Coventry.

But some Labour back-benchers, including Ken Purchase (Lab Wolverhampton North East), have accused the Government of allowing religious "extremism" into the state education system.