The Victorian Liberal Party faces a financial crisis ahead of next year's state election, with leaked documents revealing a string of budget blowouts, rising debts and lost fundraising revenue from major donors.

Figures seen by The Age confirm the party is struggling to balance its books, adding to tensions in the already bruising battle for state presidency between Liberal stalwarts Michael Kroger and Peter Reith.

Internal documents reveal the Victorian branch is expected to clock up about $1.73 million in losses by the end of this financial year, with an expected $1.52 million revenue hit from a major donor, the Cormack Foundation, and a further $233,000 in losses from an Enterprise Victoria fundraiser not being locked in as originally budgeted.

A deficit of $1.16 million was posted in the eight months to February 28, and the Liberals have also taken on $1.72 million in debt to help stay afloat – with the possibility of more to come.