Tribune thinks it’s pretty close:
Labour chiefs have until the end of this month to plug a £4 million hole in the party’s finances and avert the possibility of a formal declaration of bankruptcy.
The financial crisis in the wake of the party’s drubbing at the local and London polls comes as Gordon Brown faces another humiliation with a possible defeat by the Tories in the Crewe and Nantwich by-election.
Auditors are due to sign off the party’s accounts soon after the end of May, but there are fears that they will refuse to do so and instead declare the party insolvent.
Arrangements have been made to account for most of the party’s £21 million debt, through negotiations with the Co-op Bank and rescheduling deals done with the donors of the controversial loans which led to the “cash-for-honours” affair.
But officers have identified a gap in the balance sheet of around £4 million which must be closed in order to satisfy the auditors, either by cash in the bank or certifiable promissory notes.
The size of Labour’s financial problems, and the possibility of incurring personal liability, are reported to be the reasons for City financier David Pitt-Watson refusing to take up the post of general secretary.