British Deputy Prime Minister, John Prescott, has warned the UK that the Labour party is on the verge of bankruptcy and needs to tighten up its financial management or face being ruined by the £20 million business debts it currently holds.

Through a pitch for the party treasury post the Guardian newspaper, Prescott said, “We are facing a long-term decline in membership and a crisis in funding.

“We are only being kept alive by the Herculean work of party staff and volunteers, trade union contributions, high value donations and the goodwill of the Co-op bank.” 

Prescott, who was Deputy Prime Minister for 10 years under Tony Blair, become a member of the House of Lords early this year.

Prescott believes that the Labour party lost out of the May election based on the inadequate funding.

The Conservative party received major funding from billionaire donor Lord Ashcroft and became three times better-stocked than those of the Labour Party.

“Labour financed have always depended on trade unions, small donations and high value contributions by party members.

“Their value and role will be even more significant as the ConDem coalition looks to tackle party funding to our disadvantage.”

Prescott pointed out his approach to the recent election campaign which saw him travel 5,000 miles in a Ford Transit Van, campaigning for marginal seats.

The well-funded election campaign brought the party to power in 1997. “In 1997, the month-long battle-bus tour, with hotels, support staff and coach drivers, cost us in excess of £150,000.”