The Australian Democrats have been officially stripped of party status almost 40 years after the organisation was founded, but say they will appeal against the decision by the Electoral Commission to deregister the party.

In 1977, former Liberal minister Don Chipp founded the political party with the now famous goal of "keeping the bastards honest".

The party enjoyed immediate success, winning two Senate seats at the 1977 election, and by 1981 it held the balance of power in the Upper House.

In 1986 Janine Haines became leader of the Democrats, the first woman to lead a federal parliamentary party.

Of the party's nine elected federal parliamentary leaders, six were women.

After Ms Haines, Janet Powell, Cheryl Kernot, Meg Lees, Natasha Stott Despoja and Lyn Allison all led the party.

Aden Ridgeway was deputy leader under Ms Stott Despoja and was, during his term, the only Aboriginal member of the Australian Parliament.

In 1997, Ms Kernot, who was at the time the party leader, resigned from the Democrats and joined the Australian Labor Party.

In her resignation speech, Ms Kernot cited frustration at the limited capacity she had to minimise the damage being done by the Howard government as a member of a minor party.

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Former Democrat Andrew Bartlett led the party from 2002 to 2004, and left to join the Greens in 2009.

He said the party's position on the GST was a major factor in loss of support leading to its deregistration.

"There were some big mistakes along the way," he said.

"Most people would point to the GST decision as being a key factor that lost a lot of public faith and support, and the squabbling that flowed from that.

"It was about the perceived breach of trust and the perception that the party didn't stick to what we said we would do on some pretty core issues."

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At the 2007 federal election, the party failed to retain its last Senate seat, and in 2010 David Winderlinch, the last remaining Democrat member in any Australian parliament, resigned from the party.

Now, the Australian Electoral Commission (AEC) has officially deregistered the organisation as a political party.

The AEC said in a statement the party had failed to demonstrate it had the required 500 members.

The Australian Democrats national president, Darren Churchill, is confident the party can overturn the ruling.

"I believe we have very good grounds for appeal, we have well more than 500 members in the Australian Democrats," he said.

"We have 750 in New South Wales alone, plus we have a sizeable number in Victoria, South Australia; smaller quantities in Queensland, WA and the other jurisdictions but, you know, there's enough there."