Labour will struggle to finance a general election because of the £5m it spent on the EU referendum and big private donors deserting the party during the current turmoil over the leadership, senior sources have said.

It is understood the party’s finances are severely depleted in comparison with the Conservatives, who have raised nearly £10m more than Labour in recent months.

The Conservatives did not spend money on the EU referendum because the party was officially neutral. Labour, however, spent close to its legal limit of £5m as a major participant in the contest for the remain side.

All the candidates for the Conservative leadership have ruled out a snap general election this autumn, but Labour officials involved in fundraising for the party are still worried that a contest could come sooner than 2020.

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Leaked figures from Labour headquarters revealed this week that 310 major donors have left the party’s “thousand club” this year. It was chaired by Chris Bryant, formerly the shadow leader of the House of Commons, and Janet Royall, the party’s former leader in the Lords. The figures revealed that 86% of those leaving cited the leadership as the main reason.

Ian Rosenblatt, who gave the party more than £65,000 over the last three years, told the Guardian on Tuesday that he had resigned his membership and would not be backing the party while the current leadership remains.



“The reality is that I don’t feel there is a party I recognise, that I would wish to support economically, emotionally or with a vote,” he said. “They seem to be disengaged from the Labour party as an organisation. I don’t think Jeremy Corbyn or anyone around him is remotely interested in whether people like me support the party or not.”

Rosenblatt said Labour party officials had tried extremely hard to win back donors but appeared to get “no support at all from the leader’s office” in those efforts.



Other donors who have stopped giving money to the central party include Michael Foster, whose family has given more than £400,000 to Labour. He wrote in the Mail on Sunday in April that he and many other Jews would be “foolish to donate to a cause whose leaders view us with contempt”.

A party source said John Reid, a donor who is not the Labour peer and former defence secretary, has also stopped giving money since Corbyn’s election, after contributing more than £260,000 in the past. He could not be reached for comment.

The donor exodus comes as Tom Watson, Labour’s deputy leader, held talks with trade union leaders in an effort to negotiate a way for Corbyn to step down.

He was due to meet Len McCluskey, the general secretary of Unite, and speak to others by phone in discussions that are likely to continue throughout Tuesday afternoon.

Corbyn released a video on Monday making it clear he had no intention of stepping aside despite the resignation of more than 60 shadow ministers.

The film, directed at members, highlighted his achievements, which include forcing the Tories into U-turns on tax credits and forced academisation of schools. Corbyn pointed out that the party has won every byelection it had stood in since he became leader last year.

“After the events of the past week, I wanted to talk directly to Labour party members,” he said in the video. “Only nine months ago, I was very honoured to be elected leader of our party with 60% of the votes. I have a huge responsibility; I’m carrying out that responsibility.

“The membership has gone up by more than 60,000 in one week. We’re now at the biggest membership we’ve been, certainly in all of my lifetime.

“That membership wants and expects all of us – me as leader and members of parliament – to work together in their interests, the interests of everyone in this country, to achieve a better society, better standards of living and real equality in the future.”