Party funding rules are to be reviewed after the late disclosure of donations to the Labour Party.

The Electoral Commission announced on Friday that it is reviewing the rules governing the registration and finances of political parties.

The move follows difficulties for Labour in November after officials admitted they had failed to declare more than £2 million of trade union donations over the previous 10 months.

The party is currently struggling with a £6 million overdraft.

Part of the review will include considering whether the current penalties are a strong enough deterrent.

The watchdog will also look at the way campaigning organisations and think tanks get their funding.

Sam Younger, chairman of the commission, said: "After nearly two years experience of the new regulatory framework, we feel the time is right to look at the detail and workings of the system to ensure they are effective in delivering transparency.

"We are keen to receive feedback on these key issues so that any necessary changes to the law can be identified."