Twenty parties received �14m in donations between April and June

The Conservatives received individual donations of �4.6m - below Labour's �5m - but also got �1.7m of public money for policy development.

Labour was in debt by �20.2m as of 30 June, with the Conservatives borrowing �16.3m, and Liberal Democrats �1m.

In total 20 parties got �14m donations bringing the year's tally to �25m.

Labour, which does not receive public money because it is in government, was given slightly more from donors compared with the previous quarter, when it received �4.99m.

'Challenging' finances

Significant donations came from Iranian millionaire Mahmoud Khayami, who gave �500,000, and Muslim Friends of Labour gave �300,000.

The party also received �250,000 each from millionaire Jon Aisbitt, financier Ronald Cohen, a friend and confidant of prime minister Gordon Brown, and Nigel Doughty.

A Labour spokesman said: "Our finances remain in a challenging position but the upturn of recent months continues to be reflected in the figures from the Electoral Commission.

"Donations to the end of June 2007 show an increase of �3.6 million on the same stage in 2006."

'General election'

The Conservatives' biggest donors were Edinburgh grain merchants Philip Wilson (Grain) Ltd, who gave �300,000, followed by �287,898 from Harris Ventures Ltd, whose chairman is the Conservative peer and businessman Lord Harris of Peckham, and �250,000 from developers Gallagher UK Ltd.

Party chairman Caroline Spelman said: "Under David Cameron the Conservative Party is widening its support at base and raising more funds from a broader number of donors.

"We are more than ready to fight a general election."

Debts

The Liberal Democrats received �1.3m in donations, which included at least �500,000 from public funds.

The UK Independence Party received �84,400, and the Scottish National Party got �623,600.

Peter Facey, director of campaign group Unlock Democracy, said: "It is clear that the major parties are struggling to pay of their debts.

"In 2004, roughly 75% of major donations went to central Labour and Conservative coffers.

"Over the past 12 months, this proportion has increased to 90%.