A bitter dispute has emerged within Jeremy Corbyn’s new party over £800,000 in donations currently controlled by co-founder Zarah Sultana.

The Coventry South MP — who became sole director of MOU Operations Ltd after other board members resigned — has offered to release £600,000 to Your Party, which she co-leads with Jeremy Corbyn, in instalments beginning with £200,000 on Wednesday.

Party officials have rejected this proposal, demanding immediate transfer of the entire sum collected during the organisation’s early months.

The standoff centres on funds raised after Your Party’s July announcement, but before its September registration with the Electoral Commission, with Ms Sultana citing legal obligations to retain money for settling company liabilities.

MOU Operations was established in April by former Labour MP for Cynon Valley Beth Winter, former North of Tyne Mayor Jamie Driscoll and left-wing campaigner Andrew Feinstein to manage party finances.

The company collected approximately £800,000 in donations following the party’s July launch announcement, Sky News reports.

These funds were intended for transfer once Your Party achieved official Electoral Commission registration on September 30.

However, the three directors resigned on October 29, expressing concerns about inadequate governance structures and stating the fundraising role had been “thrust upon” them.

Their departure statement highlighted worries about potential legal liabilities, with five of Your Party’s six founding MPs declining to assume control of the company.

This left Ms Sultana to step in as sole director.

Ms Sultana has requested essential documentation directly from the Electoral Commission to facilitate proper due diligence before releasing funds, according to her spokesperson.

The MP requires access to Your Party’s constitution and financial scheme to understand governance structures, but sources suggest internal reluctance to share these documents prompted her electoral watchdog approach.

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“Zarah did not choose to become the sole director of MOU Operations Limited but was prepared to take on this responsibility to ensure funds are transferred as quickly as possible,” her spokesman stated.

Some allies to Mr Corbyn have accused Ms Sultana of deliberately withholding resources for political advantage.

Meanwhile her supporters dismiss these as “hostile briefings” amid ongoing tensions.

The financial row represents the latest chapter in months of acrimonious infighting between the former Labour MPs competing to lead the currently untitled party.

Sources describe operating within a “low trust environment” as both camps position themselves ahead of a formal leadership contest expected next year.

Your Party’s inaugural conference in Liverpool later this month faces budget constraints, with organisers lamenting working on a “shoestring” whilst awaiting the contested funds.

“We are completely focused on putting together a successful founding conference for our members, so they can democratically decide Your Party’s structures and programme,” a party spokesman said.

The dispute also involves approximately £500,000 collected through Ms Sultana’s unauthorised membership launch, which party sources claim they cannot accept due to legal risks.

The new political group got its first Scottish councillors on Friday after three Greens in Glasgow defected.

Ms Sultana, who spoke ahead rally to hundreds in Maryhill, said Your Party would offer Scots a socialist alternative to the other parties and a policy platform based on “hope”.

She said its position on independence would be decided by its Scottish members, as would the decision on a potential Scottish leader.

Ms Sultana who lost the Labour whip over her opposition to the two-child benefit cap, also confirmed the party will field candidates at the Scottish Parliament elections in May.

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