Zarah Sultana now has sole control of over £800,000 of Your Party donations following a fresh internal fallout.
Sky News understands she has assured co-leader Jeremy Corbyn the money will be transferred to the party as a whole.
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However that is yet to happen, frustrating some Your Party figures who have been trying to access the funds for weeks, in a situation one source described as “an insane mess”.
There has been a major row behind the scenes with the previous custodians of the donations – former Labour MP Beth Winter, former Labour mayor Jamie Driscoll and former South African politician Andrew Feinstein.
The trio were the directors of a company called MoU Operations, which was set up in April to support an independent alliance of MPs centred around former Labour leader Mr Corbyn.
When Your Party was launched in July, its privacy policy stated that donations would be collected by MoU until the new movement was formally constituted and had its own bank account.
Your Party was registered with the electoral commission on 30 September, when it declared assets of £850,000, but no transfer of funds was made despite repeated requests from senior figures to MoU, seen by Sky News.
The row reached boiling point this week as Your Party sources said they were considering legal action. Sky News understands lawyers had drafted a ‘letter before action’ to send to MoU, putting them on notice of court proceedings, before the three directors broke their silence and quit on Wednesday night.
In a lengthy statement, the trio said the role of holding donations was “thrust upon” them and the company had been “repeatedly been used without our agreement”. They said a transfer of funds had been further complicated by Ms Sultana’s unauthorised membership launch last month, which left MoU vulnerable to liabilities.
