Tribune reports that even with the millionaire lenders agreeing multi-year payback periods (up to 2017 according to the FT), a £4 million gap in the finances remains. There are fears that the auditors will declare the party insolvent, unless cash or certifiable promissory notes are obtained to cover this gap.

The 2007 accounts have to be signed off by early June, and this financing, or another solution, needs to be sorted out by then.

Given this urgent financial predicament, it is very strange that there are reports that Dianne Hayter has cancelled the May 22 NEC meeting. The by-election is important, but the party's administrative authority should be focusing on this urgent financial issue; there are plenty of other politicians able to handle the by-election.

What a fine financial mess Blair, Levy & Co got the party into. Even after getting through the immediate refinancing problems, we'll still be paying for the 2005 election through the next two general elections.

Tribune also reports that even with the debt refinanced, ongoing costs and the ~£1.25 million/year debt interest will be hard to cover, reporting an insider saying "The money is just not coming in."

For some financial context 2006 party expenditure was £26.6 million, with a £800k deficit for the year. Donations were £5.4 million for 2006, affiliations+membership were £12.3 million. Paying off the debts from cost-savings looks very tough.

It never rains but it pours.

Update: The Telegraph Three Line Whip blog's tame insolvency expert says the risk is that "auditors will sign off the declaration with a qualification pointing out the short fall", not insolvency. A creditor calling in their loan and the party incapable of paying is necessary for an actual insolvency crisis.