The Conservative Party has ruled out any moves towards the state funding of political parties.

The new party chairman, Theresa May, said that the public would not support such a use of public funds.

"We have consistently said that we don't believe in the concept of state funding," May told the BBC Radio 4's Westminster Hour.

"I think what we need to raise is the real value of individuals being able to voluntarily donate money if they wish to do so.

"If political parties find it difficult to raise funds, then that is a matter for them."

But she added that if state funding was introduced by the government, her party would have little alternative but to accept it.

However, the Conservative rejection could effectively rule out any chance of adopting proposals for tax relief on political donations or matched funding for donations from individuals.

The Electoral Commission is currently examining the possibility of funding changes.

But while ministers have been promoting debate on the subject - with several reported to favour state funding - the prime minister has said there would need to be a consensus across the parties before any change could be introduced.

And at the weekend Downing Street played down press reports that Tony Blair was planning to use a speech to the TUC conference in September to announce his support for state funding.

Labour has seen its funding from the unions slashed by £1.7 million in protest at its reforms of key public services.

Party chairman Charles Clarke has admitted that the recent funding cuts amounted to "a significant and unexpected reduction in funding for the party at a difficult financial time".

He is urging the unions to now agree stable funding arrangements with Labour, setting out how much they will donate to party coffers over the next three years.

With "sleaze" and "cash for favours" rows damaging the government, the Conservatives may have judged that the status quo favours them more than it does Labour.

And as local government, fire brigades and postal workers all consider strike action, the Conservatives have taken the opportunity to criticise Labour's links with its union "paymasters".