Less than a week after the Conservatives launched a controversial website urging young people to avoid debt, the Electoral Commission has revealed that the Tories are by far the most indebted party in Britain.

According to figures released today in the first mandatory publication of loans to political parties, the Conservative Party owed more than £35 million at the end of September - almost £12 million more than the amount owed by Labour.

But Labour still faces a serious financial challenge. With large donors deserting it as a result of the cash-for-honours row, the party will have to find £17 million in the next 12 months if it cannot reschedule repayments on two large commercial loans.

The parties were required to declare their loans for the first time because of the accusation raised by the loans-for peerages scandal that political parties were using loans from supporters to avoid having to publicly declare donations. That scandal is currently being investigated by Scotland Yard.

In all, eight political parties recorded loans adding up to some £60.5 million, including £1.1 million owed by the Liberal Democrats.

But although Peter Wardle, the Electoral Commission's chief executive, said that parties had generally complied well with the new legislation, he criticised Labour for failing to declare many of its donations on time - a statutory requirement for the past five years.

"While we acknowledge that local branches of parties, staffed largely by volunteers, may struggle to keep up with the administration of their finances, it is unacceptable that the Labour Party has failed to report a significant amount of donations to the national party on time," Mr Wardle said.

According to the new loans register, Labour's debts stood at £23,390,992 on September 30. The Tories’ loans stood at £35,315,060 and the Lib Dems’ added up to £1,131,277.

The Labour Party has told the Electoral Commission it has repaid loans worth £6,013,929 since it made a voluntary declaration in August. The Conservatives paid back just £274,721 during the same period.

The register details not just the amount of each loan, the commercial terms and the identity of the lender, but the repayment date. It shows that Labour has to pay back £5.5 million by the end of next month and a further £11 million by November next year.

The Conservatives, meanwhile, have to repay £2.8 million this year and a total of £20 million by next July.

In a statement, the Labour Party admitted that it was experiencing "acute cashflow problems" and had been forced to secure extensions to many of its loans. But it was still in negotiations over two commercial loans which were due imminently.

"The Labour Party is currently in discussion with these creditors to develop a repayment programme that meets the terms of these commercial loans as soon as possible," it said.

"The need for a repayment programme results from the current acute cashflow problems experienced by the party. These discussions are perfectly normal for any organisation that is seeking to manage its cashflow in difficult circumstances and meet commercial obligations as they arise."

But although both major parties are living beyond their means, the figures could prove most embarrassing for David Cameron and his leadership team after the much-criticised launch last week of a website, www.sort-it.co.uk, which the party hopes to use to tackle specific issues of concern to voters.

The first issue the party chose was that of Britain's burgeoning personal debt, which the party says is growing by £1 million every four minutes.

The website features an online video - which has also been reposted on video-sharing sites such as youtube - in which a character known as "Tosser", a garish man in a a turquoise suit, with a fake tan and gold medallions, encourages a naive youth to buy everything on a credit or store card.

'These are going to pay for themselves in crumpet,' says Tosser as he hands over a pair of flash Italian shoes in a clothing boutique.

After the young man buys a succession of goods including a wide-screen television and a new car, the voiceover intones: "Ignore the tosser inside you. Take care of your money at sort-it.co.uk!"

The level of Conservative debts also suggests that despite the party's resurgence in the polls, its new leader has not yet managed to attract sufficient powerful new backers - which makes his decision not to speak yesterday at the Confederation of British Industry's annual conference even more surprising.

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