Accounts submitted to the new Electoral Commission reveal that Labour spent £5.049m on ads compared with the Tories' £4.479m even though the Tories were trailing badly in the opinion polls.
Tory officials said the party had decided "not to throw good money after bad" but the figures may also reflect the party's failure to secure poster sites after Tony Blair delayed the poll from May to June.
In 1997, Labour spent an estimated £7.3m and the Tories £13.1m. The big drop reflects new legal limits on campaign budgets, which meant the parties could spend only £15 million each last June.
The 1997 election looks certain to prove the high water mark for election budgets and, with politicians increasingly sceptical about the value of ads, party officials believe that spending on future campaigns will be in line with the 2001 figures.
Overall the Tories spent more on last year's campaign -- £12.015 million to Labour's £11m. The Tories' £568,000 budget for party political broadcasts was twice as big as Labour's (£242,000). But Labour spent £1.5m on direct mail to the Tories' £1.2m.
The Liberal Democrats had an election budget of only £1.2m, which included £200,000 on ads, £57,000 on broadcasts and £54,000 on direct mail.
Unison, the leading trade union, which ran a campaign in favour of investment in public services, spent £770,000.
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