Election must not be decided by our bank balance, says Blunkett

With skirmishes hotting up ahead of a general election expected in May, David Blunkett admits Labour has just 8m to fight the national campaign – much less than the 18m the Tories are likely to spend.

In Yorkshire's crucial marginal seats, the Tories raised 65,200 in donations last year compared with the 24,514 trade unions gave to Labour constituencies.

Former Home Secretary Mr Blunkett, MP for Sheffield Brightside and chairman of Labour's election development board, hit out at the political funding system claiming Labour is left struggling to compete "as those who have an expectation of benefiting from a Tory government are placing their bets".

In a sign of increasing pre-election clashes, a senior Labour Minister has also criticised the Tories for failing to select candidates yet in ten seats in the region.

Rosie Winterton's claim that the Tories are "neglecting our region" was, however, angrily dismissed and Labour were urged to "stop dithering" and call the election.

Mr Blunkett spoke out as new figures revealed Labour was the only major party to have increased its campaign spending for this year's Euro elections, where they were beaten into third place by the UK Independence Party – spending 2.3m compared with 1.7m in 2004. The Tories cut their spending from 3.1m to 2.5m.

This week's 400,000 billboard campaign by the Tories – with 1,000 adverts featuring Mr Cameron's face, including 60 in Yorkshire – has left Labour warning they would face bankruptcy if they tried to compete with the opposition's spending.

Mr Blunkett warned the party was going into an election at a greater financial disadvantage than at any time since 1983, when it suffered a landslide defeat, and said it had to be careful "so we don't end up bankrupt after the election if this all goes pear-shaped".

"We are asking people of goodwill to help us to make this a fair fight in a democracy that shouldn't be reliant on who has the biggest bank balance, but on who has the best policies for the people of Yorkshire," said Mr Blunkett.

Limits on election expenditure mean parties can only spend 18m, although candidates can each spend 40,000 as well. So far Labour has about 8m to spend, although Mr Blunkett hopes that will rise towards 10m.

Labour activists have long complained about the money ploughed into their rivals by controversial donor Lord Ashcroft, although Tory officials respond that Labour is bankrolled by the unions and say their fundraising is little compared with the benefits from a 540m Government publicity machine.

Latest figures reveal the Tories pocketed 28,700 in Selby & Ainsty – a new seat they expect to win – last year, mainly from businesses, and 14,000 in Halifax. Labour collected most money – 5,000 – in Batley & Spen, another Tory target.

Meanwhile, Labour has criticised the Tories' failure to select candidates in ten seats – albeit ones they are unlikely to win. In contrast, they have candidates selected in every seat.

Ms Winterton, Labour Minister for Yorkshire and the Humber, said: "Despite all their hot air about their new found popularity in the North, the Tories seem to be struggling to find prospective candidates.

"The fact that they don't have candidates in one in six areas in Yorkshire and the Humber reveals that the Tories are neglecting our region, just like they did when they were last in government."

A Tory spokesman said: "We are committed to finding strong candidates to fight every seat and make no apologies for taking our time to do that."