Labour has paid off its £24.5m debts and abandoned its forced move out of Westminster, the party’s general secretary has announced.

Iain McNicol hailed the “huge accomplishment” for the party, saying it could now “move forward, away from the cloud of debt that has been hanging over us for so many years”.

He said it was “essential” that Labour became an organisation that could “live within our means” and said moving into the black would put it in a stronger position to make long-term financial decisions.

Significantly, it means the Labour party headquarters will not be forced to decamp three miles away to Kensington – as had been planned for later this year.

Having its base so far away from Parliament and the Leader’s office would have been a logistical nightmare for the party.

News of the High Street Kensington move attracted mockery from some quarters, given that it sits in a Tory-stronghold and is the richest borough in London, with average house prices at £1.4m.

Instead the party will remain a five-minute walk away from the Houses of Parliament.

Mr McNicol said he had signed the lease on a new headquarters on Victoria Street, just around the corner from the party’s current base in Brewers Green.

Announcing the news that the party had finally paid off the debt accrued after the 2005 general election on the LabourList website, Mr McNicol wrote: “Over the last few years we have had to take some tough decisions and make some difficult choices, but we have now paid off the last of our loans and achieved our goal.

“This is a huge accomplishment for the organisation and means that the Labour Party can now move forward, away from the cloud of debt that has been hanging over us for so many years.