The Labour Party failed to declare donations of almost �2m in time for the publication of Electoral Commission accounts.

Under legislation introduced by the Labour Government in 2001, political parties are obliged to inform the independent commission of any donations they receive over �5,000, and these accounts are published quarterly.

The commission regards the failure to declare donations on time as a serious matter

Sam Younger Electoral Commission

But Labour failed to report �236,952 on time for the first quarter of 2002 and �1,815,549 for the second quarter.

The commission said late submissions from Labour and the Conservatives was a "serious matter" and it would be investigating further.

A Labour spokesman blamed an "administrative error" for its failure to declare on time and argued that the commission was informed as soon as the party was aware of the oversight.

Criticism

Labour originally reported that it received �591,000 in donations during the second quarter of 2002.

The party later reported that during the period between June and August, it had in fact received a further �1,815,000 - almost three times the original amount declared.

Bernie Ecclestone's �1m gift caused trouble for Labour

The Tories were late in reporting �250 for the first quarter and �2,900 for the second quarter.

The Green Party also faced criticism for failing to declare �2,545 on time for the second quarter.

The affair may overshadow a positive third quarter set of figures for Labour, which shows the party receiving almost �3m, bringing the revised total for 2002 up to �8,807,057.

Internal review

The Tories received �1,780,038 in the third quarter and the Liberal Democrats �165,778.

Electoral Commission chairman Sam Younger said: "The commission regards the failure to declare donations on time as a serious matter.

"In accordance with our usual procedure we will examine with the parties concerned the reasons for the late submissions before deciding what further steps might be appropriate."

Donations received:

Labour �2,788,988 Conservatives �1,780,038 Liberal Democrats �165,778

A Labour spokesman said the party was now reviewing its internal procedures in the light of the commission's criticism for failing to declare financial contributions from trade unions.

The spokesman denied the party missed its deadline for declaring the contributions in order to talk up tensions with the unions ahead of the party conferences.

"We have been reviewing our procedures across the party to ensure prompt declaration of contributions and are keeping the Electoral Commission informed of this," he added.

�9m debt

Substantial sums of money were received from the unions in the second quarter of the year.

The GMB gave �215,000; Amicus AEEU, �465,000; Unison, �325,000 and the T&G, �225,000 - all unions that have expressed public dissatisfaction with the government.

It is the party and not the union that is obliged to declare the donations.

Donations received by other parties:

Scottish National Party �87,075 Plaid Cymru �17,212 The Co-operative Party �151,274 The Green Party (England and Wales) �4,668 Scottish Socialist Party �4,993 Legalise Cannabis Alliance �7,800 Upminster and Cranham Residents' Association �10,000

During spring 2002, three major unions, the GMB, CWU and RMT announced that they would be reducing their financial contributions to the party.

Earlier this year, newspapers reported that general secretary David Triesman had gone to the unions cap in hand seeking a bail out for the party, which is �9m in debt.

But Peter Facey, director of Cleanpolitix.com - the campaign for party funding reform, said Labour's failure to declare almost �2m donations, "makes a nonsense of the rules and procedures" the party had devised.

"Misrepresentations of this magnitude are bound to undermine public confidence in party funding practices yet further and fuel suspicion," he said.

Labour's biggest donor was city stockbroker Charles Peele who gave �100,000.

The Conservatives received the same amount from William Harding.

Paul Tyler, for the Lib Dems, said: "Rich donors continue to save the Conservative and Labour parties from bankruptcy.

"No wonder the public see them as alternative armies for hire in the pay of millionaires.

"The case for a fair and transparent system of state funding linked to matched funding from members has never been so strong."