Unite chief spends £55K of union's money on artwork while members feel the crunch

Left-wing Unite chief Derek Simpson bought the piece, called Feeling Material Again IV, in a Labour fundraising auction, according to sources at the event.

The lot raised the most money for the cash-strapped party - outstripping bids to play tennis with Tony Blair, lunch with Sir Alex Ferguson or being a character in Alastair Campbell's new book.

Derek Simpson is said to have spent £55,000 of his union members' money on a piece called Feeling Material Again

But the union's two million members, who are among the country's lowest paid workers, are unlikely to feel that the significant outlay is money well spent.

One Labour MP with close union ties said the money represented about half of the union's operating surplus from last year.

'I'm not sure the members will be entirely happy about this at a time when everyone, even unions, have to watch the pennies. Sure it is ultimately a political donation, though I suspect many members are not too happy with Labour at the moment.

'There are plenty of campaign, including those for better pay and conditions, which need funding at the moment.'

Earlier this year, Mr Simpson and fellow Unite boss Tony Woodley faced criticism for plans to spend £25,000 on a trip to celebrate 50 years of Communism in Cuba.

They were due to lead a 12-strong delegation to salute retiring dictator Fidel Castro, 81, in May.

Gormley, who won the Turner Prize in 1994, has become one of the world's most celebrated artists.

According to the Labour Party website, the painting - stamped with 'For Labour' on the back - is 'concerned with the relationship between body and space and the relocation of subject from the body as object to the field of energy it might produce'.

Last night, some pointed out that the Gormley purchase could be considered a shrewd investment as it is likely to rise in value.

It was one of the lots which attracted high bids during the Labour fundraiser at Wembley Stadium on Thursday. In total, it is believed to have boosted party coffers by around £500,000.

That will make little dent in the £20million-plus debts which has taken Labour to the brink of bankruptcy.

It only averted financial collapse because of a written guarantee that Unite will continue to provide significant funding. Several wealthy businessman have also been persuaded to delay calling in millions of pounds in loans.

The auction - part of a gala sports dinner - was conducted by former No10 spin chief Alastair Campbell, who had been forced to urge Cabinet ministers to drum up interest in the event after a sluggish start.

The auction also raised money for the Gordon Banks statue fund through the chance to play in a Gordon Banks XI against a Pele XI. It raised thousands of pounds with proceeds split evenly between the statue fund and the Labour Party.

Each of the 40 tables were hosted by a celebrity, including pop guru Pete Waterman and athletics great Steve Cram.

Prime Minister Gordon Brown and his wife Sarah were among the 600 guests and the evening ended with the Bee Gees' Robin Gibb and soul diva Beverley Knight providing entertainment.

Labour would only say that 'hundreds of thousands of pounds' had been raised and it refused to reveal the names of winning bidders.

But they will be listed in party accounts filed to the Electoral Commission. Anyone who donates more than £5,000 must be named. A similar event last year

A spokesman for Unite declined to comment.