Former cabinet minister Peter Mandelson has used the unveiling of the latest political donations to call for more state funding of parties.

The new figures show donations to Labour have dropped by 83% in the last three months, with the party now said to be �8m in the red.

Donors are torn to shreds, they are surrounded by unsubstantiated allegations about their motives for giving

Peter Mandelson

Mr Mandelson said such debts were inevitable in a post-election year but argued donation rows were paving the way for more state funding.

He accused the Conservatives of "compound hypocrisy" for opposing the idea when they have received more than �1m in public funds between April and June this year.

Everton boost

The Electoral Commission has just published the list of large donations for those three months.

The biggest donation came from the owner of Everton Football Club, Bill Kenwright, who gave the Labour Party �200,000.

The largest Conservative windfall was from Sir Stanley Kalms, chairman of the Dixons store chain, who last year became the Tories' treasurer and chief fund raiser.

Stanley Kalms produced the biggest Tory donation

But the party also received �1,977,807 in grants given to fund the work of opposition parties.

Such money is aimed at helping research rather than for campaigning.

Tony Blair has said cross-party consensus would be needed before more general state funding of parties could be introduced.

New Tory chairman Theresa May said this week. "We have consistently said that we don't believe in the concept of state funding."

Donor backlash

It was that attitude which prompted Mr Mandelson, speaking on BBC Radio 4's Today programme, to accuse the Conservatives of double standards.

The former minister said Labour supporters were still giving the party financial backing, with �4m in donations received this year.

He questioned how long such gifts could continue when donors came under fierce media pressure.

Mandelson says post-election debts are nothing new

"The fact is that when people, including large donors, contribute to the party, they attract an enormous amount of adverse publicity," said Mr Mandelson.

"They are torn to shreds, they are surrounded by unsubstantiated allegations about their motives for giving."

Mr Mandelson played down talk of financial crisis for Labour.

"I have never known a year following a general election when the Labour Party has not been in the red," he said.

Wasted money?

The Hartlepool MP argued the public would be prepared to pay to ensure a democracy where more than just one party could put up candidates.

Mark Seddon, a member of Labour's National Executive Committee, said cutting down on unnecessary advertising, not state funding, was the answer to donations rows.

But Mr Mandelson countered: "Elections need to stimulate interest, they need to mobilise the involvement of people, you have to get arguments going."

Conservative finances

The latest figures show the Conservatives received �1.9m in donations between April and June.

Labour was given donations worth �591,000 and the Liberal Democrats received �214,000.

The figures bear out Conservative claims that their finances are in "a healthy position".

The party has, however, yet to publish figures for the last financial year, covering the general election.

Labour has admitted it is heavily in debt.

Last month the party general secretary, David Triesman, accepted that Labour was �5m to �6m in the red and said that the party faced "financial challenges" in getting back into the black.