The reform group Unlock Democracy has said that the question of how political parties are funded is a "ticking time bomb" for the UK parliament.
The comment came ahead of an exploratory session looking at the contentious issue by the Committee on Standards in Public Life - which is supposed to ensure probity and ethical behaviour.
"Until we get a cap on donations, this will continue to be a major potential source of scandal and embarrassment to political parties," said Unlock Democracy's deputy director, Alexandra Runswick.
She continued: "We urge the party leaders to thrash out a deal, before this issue blows up in their faces.
“This is a cross party issue and vested interests must be put aside to prevent further erosion of public confidence in our political system. If a deal cannot be reached it will only a matter of time before the next scandal.”
Ms Runswick concluded: "The unresolved issue of Party Funding is a ticking time-bomb and we welcome this pre-emptive first move by the Committee to defuse it once and for all."
There is widespread concern about the number of wealthy individuals and companies contributing to Britain's largest political parties.
Reformers are also arguing about large trade union donations, though labour movement activists say that these should be considered a counterweight to corporate lobbyists and big business.
The question of state funding of parties also comes into the debate. But civil society activists suggest this could be a retrograde step, because political groups should be supported by, and accountable to, the public, not government.