Jeremy Corbyn’s new left-wing party is in a stand-off over £800,000 raised by Zarah Sultana, who is meant to be founding the party with him.
The money was raised when Sultana launched an unauthorised membership scheme for people wanting to join the group currently operating under the name Your Party.
Senior figures have accused her of withholding the funds despite publicly agreeing to transfer the money.
A spokesperson for Sultana said she “is in the process of transferring all funds and data” but was conducting “essential due diligence as part of this process”.
But the delay has sparked anger among Your Party insiders, who say the funds are essential for its founding conference later this month. A source in the party said it would likely be “forced to reduce delegate numbers” at the event.
The problems stem from a schism in the party caused when Sultana launched a membership portal through its official email account, taking payment and data from an alleged 20,000 people.
The money was held by MoU, a company set up in April to hold donations for the fledgling movement.
Corbyn branded the emails “unauthorised” and urged supporters to cancel direct debits.
The membership portal was later replaced, but not before the dispute escalated into legal threats and accusations of a “sexist boys’ club”.
The pair have since reconciled.
The plan had been to transfer all the money and data from MoU to Your Party after it was registered with the Electoral Commission on 30 September, then wind up the company.
But the money, believed to be around £800,000, has not yet been transferred.
Last week, the founding board of MoU, which included former Labour mayor of North of Tyne Combined Authority Jamie Driscoll, resigned en masse – making Sultana the sole director.
In a joint resignation statement, the three directors insisted they wanted to transfer the funds but Your Party officials had ignored questions about governance and legal liabilities.
Your Party officials have dismissed MoU’s complaints as irrelevant and accused it of shifting the goalposts. Officials claimed they sent multiple proposals to move the funds, but were ignored by MoU.
A Your Party spokesman said “We are focused on delivering a successful founding conference for our members.
“While this task is made considerably harder by the continued retention of Your Party funds by MOU Operations Ltd, we will not allow anything or anyone to stop this party from going ahead.
“Working-class people need a party which stands up for them.”
A spokesman for Sultana, Sultana, a co-director of Your Party, said: “Zarah is in the process of transferring all funds and data to Your Party, as she has already made clear publicly.
“Obviously, she has a duty to conduct essential due diligence as part of this process.”
The row is the latest twist in a turbulent start for the party, which has attracted tens of thousands of members but been dogged by internal disputes over leadership and even the party’s name.
Sultana has pushed for the party to be called The Left Party, while Corbyn hinted the name Your Party could stay.
Members will vote on the official name at a founding conference in Liverpool on 29 29 November.
Despite high-profile clashes, Sultana told the BBC the party was a “40-year project” aimed at “running” the government.
Sultana said she hopes to co-lead the new party with Corbyn, but will “throw her hat in the ring” if members opt for a single leader when the party constitution is agreed at conference.
