Graffiti artist Banksy nearly had his secret identity revealed after he donated a canvas to support Ken Livingstone's Mayoral election campaign.

The anonymous artist offered to auction "Sketch for Essex Road" - a canvas of two children with hands on hearts pledging allegiance to a Tesco carrier bag on a flagpole - to help fill Kens coffers.

But the plan hid a snag when the winning bid of £195,000 exceeded rules about safe guarding the anonymity of its donor.

Electoral funding rules ban anonymous donations of more than £200, which would have meant the notoriously private graffiti artist would be exposed to the world.

In order to protect Banksy - whose work in Bristol includes a naked man hanging from a window at the bottom of Park Street - Labour had to strike a deal with the Electoral Commission to accept just £120,000 for the work, potentially losing out on £75,000.

The deal was that the party fix a notional market value of £75,000 to the painting, and instead accept a £121,600 "separate" donation from the winning bidder, the gallery owner Steve Lazarides, who deals in Banksy's works.

Because Banksy was in effect donating the work for free, he was able to retain his anonymity and not be registered under his real name as a Labour donor.

The saga started in March when the Aquarium Gallery in London, hosted a high-profile art auction to raise more than £230,000 for the former mayor's ill-fated re-election campaign.

The Banksy canvas was the star lot, the final work to go under the hammer and attracted frenzied bidding, leaping quickly to £100,000 and beyond.

Mr Livingstone said he was "completely light headed" when the bidding approached £200,000.

By comparison Bristolians get to enjoy much of the hometown artists work for free, such as the Mild Mild West mural in Stokes Croft, once voted the city's favourite alternative landmark.

This isn't the first time the Bristol painter has been threatened with exposure.

Last month a national newspaper claimed to have at last unmasked Banksy as 34-year-old former private school pupil Robin Gunningham.

A Banksy spokesman refused to confirm or deny the reports, and declined to comment on the auction saga.

A Labour spokesman said the party was "satisfied that all our donations fully comply with the law", adding: "Obviously we carry out diligent checks on all donations and take care that we are fully compliant with the law.

"We are grateful to all our donors for their kind support."

The Electoral Commission said it could not comment on discussions with political parties.