Massive borrowing to fund last year's general election campaigning has left Labour and the Conservatives battling to control their finances.
In a week in which the the two major parties rowed over who is most capable of running the government's finances, they both proved incapable of balancing their books in the run up to last year's poll.
Their massive spending on the campaign, which forced them into relying on secret loans from wealthy backers, provides fresh indication of the extent to which both feared for the potential outcome.
The details of the accounts also raised fresh questions about the 'commercial' terms of the loans taken out by Labour.
Labour loans
In their report on the accounts, Labour general secretary Peter Watt and treasurer Jack Dromey confirmed that the party received £13.95m in loans during the year.
And £2m was lent by fashion businessman Richard Caring in March this year, with Labour saying it was "pleased to have received financial support from these individuals".
Political parties were not required to disclose the source of loans provided they were made on commercial terms.
Indicating that it was meeting this requirement, Labour's accounts disclosed it is being charged interest at 6.5 to 6.75 per cent, two points above the Bank of England rate.
All the loans were taken out during 2005, with repayment terms ranging from 180 to 365 days.
But a note in the accounts said: "The terms of the loan agreements are such that, if the loan is not repaid on the expiry of its initial term, then the loan is generally repayable 180 days after the party receives a written repayment notice."
In effect, if the person who made the loan does not take specific action to require it to be repaid, Labour's 'commercial' loans do not require repayment.
The clause will raise fresh questions over whether the loans were ever intended to be repaid and, if so, whether they can genuinely be classed as 'commercial' under disclosure rules.
Watt and Dromey said Labour had a "stable financial platform for the foreseeable future".
Two of the party's lenders have said their money must be repaid, but others have agreed to reschedule their loans to "future periods".
Tory loans
The Conservative accounts revealed the party had interest bearing loans totalling £22.9m in 2005.
The party was given more than one year to repay around £14m of the debts.
Another £8.4m required payment "in one year or less, or on demand".
Conservative treasurer Lord Marland said that the party did not need an overdraft.
It had balanced the books before campaign expenditure and covered the cost of campaigning through donations and loans.
"We are working towards a break-even turnout for 2006, before taking credit for any of the loans which have been converted into donations," he wrote.
Some £235,000 worth of loans were converted into donations in 2005.
And amid demands for the disclosure of loan details earlier this year, after the accounting period, the Tories repaid some £7m and had £4.6m in loans waived.
Losses
At the end of 2005, Labour's total net liabilities stood at a huge £20.9m while the Conservatives were in the red to the tune of £18m.
And for the 12 months alone, Labour was £14.5m in debt compared with £15m for the Tories.
The Liberal Democrats revealed a deficit of £207,052 over the same period.
Spending
Labour said that in 2005 it spent £23.8m on running costs and a further £15.1m on the election campaign.
It also paid out £1.35m on interest costs and made £1m in grants and payments to constituency parties.
Total Labour spending was £49.8m.
The Conservatives spent £9.4m on staffing last year and £7.4m on management and administration.
And Tory election expenditure amounted to almost £15.7m, taking total spending to £39m.
The Lib Dems reported campaign spending of £4.8m, along with £1.55m on staff costs and £818,580 on office costs.
The party's total spending in 2005 was just under £8.8m.
Income
Labour raised £1.9m in donations, almost £3.7m in membership fees and £8m from affiliations.
The party's commercial income stood at just under £3.4m, taking total income to £35.3m.
The Conservatives raised £13.5m in donations and £2.3m from commercial activities.
Total income for the Opposition was £24.2m.
For the Liberal Democrats, income was spread evenly between donations, membership fees and conferences.
The party reported total income of £8.58m.
