How the unions bailed out Labour with £10million

The scale of Labour's reliance on the trade unions was revealed yesterday as the debt-ridden party published its accounts.

In the last year alone, they donated more than £10million to the party, saving it from bankruptcy.

Latest figures show that almost 93 per cent of party funding now comes from the unions, compared to 29 per cent just six years ago.

Business leaders and individual donors have deserted the party following the cash for peerages affair and Labour's slump in the polls.

The Tories say the unions are taking advantage of Gordon Brown's financial dependence on them by squeezing out policy concessions which add up to a lurch to the Left.

Last week at a meeting in Warwick between ministers and union barons to draw up a draft manifesto, Mr Brown conceded a lower age limit for the full minimum wage, new rights for agency workers, and measures to make it easier for workers to take unpaid leave.

Conservative chairman Caroline Spelman said: 'Gordon Brown and the Labour Party have only been able to stave off bankruptcy by doing deals with union barons.'

Labour's accounts, published by the Electoral Commission, revealed the party has more than £15million in outstanding loans and must find almost £26million this year to pay off creditors.

On top of the money from the unions, £2million was given by steel magnate Lakshmi Mittal and £2million by supermarket boss Lord Sainsbury.

Party treasurer Jack Dromey, the husband of Labour deputy leader Harriet Harman, paid tribute to the support from the unions in his statement to the Electoral Commission.

'We are grateful for the fantastic support that we receive from our affiliates, both trade unions and socialist societies,' he said.

But he added: 'On the financial position of our party, we recognise that, despite the progress that has been made, significant problems remain. We have a big job ahead therefore to put the party on a firm financial footing for the future.'

Taking advantage: The walkout by Unison workers earlier this summer highlighted the growing power of the unions

Over the past few months, the unions' stranglehold has got even stronger.

Most recent figures show that in the first three months of this year, 92.6 per cent of Labour donations came from the unions.

And Labour was only able to get its accounts signed off and avert financial collapse after obtaining a written guarantee from the union Unite that it will continue to provide funding in the future.

In order to avoid complete meltdown, the party has been forced to reduce staff numbers - the party employed an average of 193 people in 2007 compared to 193 in 2006.