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Cash crisis looms for debt-hit FF as €10m funding lost

FIANNA Fail's electoral headache is set to give way to a financial meltdown.

Micheal Martin's debt-ridden party will lose more than €10m in State funding over the lifetime of the next Dail, the Herald can reveal.

And a forthcoming ban on corporate donations and a lack of support for fundraising efforts will compound the problem.

This means that having brought the country to the brink of ruin, the election losers will now be battling to secure their own financial future.

The Herald understands Fianna Fail already has debts of about €3m, which is likely to mount after its worst ever election result.

The loss of 53 TDs will automatically cost Fianna Fail in excess of €2m this year alone.

"There will have to be big changes. Things were bad going into the election campaign but it is going to be very tough now," said a source.

Reduced

The funding disaster could scupper Micheal Martin's chances of rejuvenating the party's grassroots. He has already stated his intention to undertake a "nationwide tour" aimed at rebuilding the party.

A source said: "It's not a healthy situation. Fundraising has been close to impossible because of the public mood and now State funding will be hugely reduced."

Figures from the Standards in Public Office Commission show that the Fianna Fail received €3.6m from the Exchequer through the Party Leader's Allowance in 2009. For the first 10 TDs gone, Fianna Fail will lose €57,214 a year, while each of the next 43 will cost €28,616 in funding.

They will also lose money as a result of having a greatly reduced number of senators.

This means direct State funding to the party will drop to less than €1.5m for the duration of the 31st Dail.

Each TD would also be expected to bring in a certain amount of funds to the central organisation every year through local fundraising drives -- but with just 20 members of the Dail, this income stream will also dry up.

Sources have admitted to the Herald that party headquarters will quickly start to examine alternative ways of raising cash, including a membership fee.

The cash-strapped organisation tried a number of initiatives to raise money before the General Election with little success.

Before Christmas their annual €95-a-plate Cairde Fail dinner was cancelled amid fears that it would result in a public backlash. Another fundraising breakfast in Cork to be hosted by Micheal Martin was cancelled in the run up to the election. Officials denied that it was called off due to a lack of interest in the €100 tickets.

kdoyle@herald.ie