Union stops donations to Labour Party

The Labour Party's struggle to raise a war chest with which to fight the next general election has intensified after Britain's second largest union said it was suspending donations to local parties.

Dave Prentis, the general secretary of Unison, said his members were tired of "feeding the hand that bites them". He told members at the union's national conference that it no longer wished to back candidates that supported further privatisation proposed by the Government, including a "privatisation of our NHS more radical than anything our members saw, even in the dark days of Thatcher". It will come as a worrying sign for the party's leadership with an election on the horizon.

The party remains heavily reliant on unions for funding as other major donors, attracted to Labour by Tony Blair's leadership, are deserting the party. They include Richard Caring, owner of a restaurant empire, and former city businessman Rod Aldridge.

Its fund-raising drive is currently being easily eclipsed by the Tories. Labour raised £2.8m in the first three months of the year, compared to more than £4m handed to the Conservatives. Unison has given local parties more than £400,000 in donations since 2001.