SCOTTISH Labour is facing its leanest-ever election battle yet with the party said to have access to considerably smaller financial resources than at the last Holyrood poll.

A report yesterday claimed the party plans to spend just £200,000 to fight the May campaign – down from £1 million in 2011.

But last night the sum, reported in The Sunday Times, was dismissed by Labour insiders who indicated spending would be higher.

Colin Fox, the former Scottish Socialist Party MSP, who is expected to be named today as one of the candidates for Holyrood elections for the Rise alliance, said news Labour was facing a squeeze on its election spending indicated the party’s London headquarters had little confidence in a successful result at the Scottish Parliament elections.

“It indicates they think the party’s chances in Scotland are pretty dismal,” he said.

He added: “In 2003, the SSP spent £300,000 to get six MSPs elected – that was 13 years ago and the price of fighting elections has increased since then.

“Rise has launched a campaign for £100,000, but we are only standing in the eight regions and are not fighting constituency seats. It suggests that funding for Labour candidates who are standing in the 72 constituencies will be thin on the ground.”

A Scottish Labour spokesman said: “While the SNP will undoubtedly outspend us with their Lottery winners and other donors like Brian Souter, Scottish Labour will continue to fund election campaigns in Scotland and benefit from the pooled resources of the wider UK Labour movement.

“Politics in Scotland is changing, it’s now about the different choices we can make in Scotland, and after with the Scottish Budget it is clear only Labour will offer an anti-austerity alternative.”

A TNS poll last week forecast support for Labour was down to 21 per cent in the constituency section of the Holyrood ballot, and 20 per cent in the list section, leaving the party with just 25 MSPs, down from 38 currently, if replicated in May.