The society spent more than pounds 1.1m last year against an income of pounds 851,000. However, it said it was still in a 'strong financial position' and was on course to register a surplus next year.
The loss, disclosed to members in its annual report, comes after a period of surging interest in meat-free diets. According to a survey last year, the number of vegetarians has doubled since 1990, rising to 7 per cent of adults, or 3.1 million people.
The society responded by launching expensive campaigns such as the first National Vegetarian Week, last October, recruiting a new director from mainstream publishing and trying to turn its magazine, The Vegetarian, into a consumer product. Several of these initiatives backfired.
The society has also been riven by bitter internal disputes. Dr Alan Long, its former research adviser, was ousted from membership two years ago after persistent criticisms of its operations.
Last year, along with other dissatisfied former members, he formed the breakaway Vegetarian Economy and Green Agriculture (Vega) group.
Dr Long said yesterday the loss was a result of 'incompetence, overstaffing, bad management, vanity and amateurish efforts to cash in on the commercial market'.
He said the society had frittered a pounds 500,000 windfall from the sale of its London headquarters and had misused the lucrative V-sign licensing system.
Philip Lloyd, its chief executive, rejected the criticisms and blamed 'embittered and twisted people' for spreading rumours about a crisis in the society.
'I don't think there ever was a crisis. A couple of years ago we were sitting on cash resources of over pounds 500,000. The strategic decision was then taken to spend a considerable amount of this on campaigning. That is part of our job, to make money to spend money. We have been victims of our own success.'Reuse content