Scottish Labour Party's dire straits are laid bare by the latest submissions to the Electoral Commission, which show donations down almost 90% and overall income reduced from more than £1m to less than £400,000.

Figures submitted to the commission show just how far the party has slipped behind the SNP since its political heyday in Scotland.

Labour said there is no significance in the latest figures and its income fluctuates in line with electoral cycles, which is why its overall income from donations fell from £555,976 in 2007 to just £60,523 a year later.

The party points out that its income from membership rose during that year from £114,403 to £137,806, as an argument that the overall drop in income that year from £1,029,538 to £396,195 was not significant.

"There are always spikes in election year and it is also the case that some money raised in Scotland goes to the UK," said a Labour spokesman.

However, it is hard to look at the current figures and not see a pattern of decline, even when compared to the electoral cycle, in comparison to Labour's political rivals north of the border.

Nationalist income reached £2.6m in 2007 and fell to £1.76m in 2008, while donations to the SNP fell from more than £1.2m to £540,000 between 2007 and 2008, demonstrating the gulf that has opened up over Labour in recent years.

The latest UK-wide figures show that the Conservatives outspent Labour by more than £5m in 2008, as Gordon Brown's party made efforts to reduce its massive debts ahead of the general election.

The Electoral Commission figures show that the Conservatives spent £31.9m in 2008, fractionally less than the party's income of £32.4m.

Meanwhile, Labour spent £26.2m of the £34m it raised. Labour's accounts show its net debt was cut from £18.9m to £17.5m last year, aided by a court decision that allowed the party to claim back £4.6m in overpaid VAT as well as interest dating back to 1977.

Outstanding loans from donors who bankrolled Labour's election campaign in 2005 were reduced from £15m to £11.5m over a year. A restructuring plan agreed with the donors a year ago will see Labour paying off these debts at a rate of £2m a year, said party treasurer Jack Dromey.

Labour's income from affiliations, including trade unions, rose from £7.9m to £8m in 2008, but donations dropped from £11.2m to £9.5m and membership subs fell from £4.4m to £3.9m. The party's accounts show a surplus for the second year in succession - of £7.1m, compared to £7.5m in 2007.

Labour paid off around £1m in loans from wealthy backers over the course of 2008, while loans of £2m from former science minister Lord Sainsbury and £300,000 from curry tycoon Sir Gulam Noon were converted into donations.

Tory chairman Eric Pickles said 2008 marked the party's "electoral resurgence" with successes in local government elections, the London mayoral race and by-elections in Henley as well as Crewe and Nantwich.

The party's total income dropped from £33.5m in 2007 to £32.4m, but Conservative Party treasurer Michael Spencer and registered treasurer Ian McIsaac said "given the depth of the recession and the instability in the financial markets this can be regarded as a good achievement".

The 2007 figure was inflated by the conversion of £3m in loans to donations, compared to just £73,000 last year. The treasurers said: "We are working hard to diversify our donor base and reduce our reliance on major donors." They added that the party had a "solid foundation" for the next general election campaign.

The Tories said developments in internet-based fundraising were taking place this year. US President Barack Obama made extensive use of the internet to raise the funds necessary to finance his campaign for the White House.