The funding of political parties should be extended through tax relief for small donations, the Electoral Commission has said.

The elections watchdog says there is no public or political consensus on a shift to state-funding or a cap on private donations.

Instead, the commission wants to see tax relief on donations of up to £200 a year, or matching state funding for the same amount, as an "interim measure".

The Tories said they were "not convinced" of the need for more state funding.

"At a time when there are failures in our public services, people want to see their money spent on improving schools and hospitals, not going into the coffers of political parties," said Liam Fox, Conservative co-chairman.

"There will be little public support for taxpayers' hard-earned money going towards bigger grants to political parties and subsidising more junk mail during local elections. Parties should be allowed and encouraged to raise their own funds to fund their campaigning activities," he added.