THE Labour Party is facing calls to repay up to £100,000 after it claimed rates relief on its Burnley headquarters for almost 20 years.

Party chiefs applied to Burnley council for charitable status in 1990 so officials could claim 75 per cent rates reduction on the town centre Victoria Street offices.

Political opponents say the party should never have qualified as a charity and are demanding that the rates relief, which has now been withdrawn by the council, is repaid.

Burnley MP Kitty Ussher, who is now the lead tenant at the three-storey complex, said she was unaware of the arrangement.

But she has pledged to repay the relief the premises have incurred since she entered Parliament in 2005.

The relief row erupted after Liberal Democrat councillor Darren Reynolds raised the issue at a meeting of Burnley full council.

It was first thought the rates relief had been offered for only eight or nine years but it emerged that it had been in place since 1990.

Political sources estimate that the total saved, dating back to 1999, was around £40,000 to £45,000. The total amount going back to 1990 is expected to be at least double this amount.

Council leader Coun Gordon Birtwistle said: "They should never have claimed this relief in the first place and I hope that they will repay the money.

"Effectively the taxpayers of Burnley have been subsidising the Labour Party so I hope they will accept their error and find the money that they have claimed.

"There is no way that they have ever been a charitable trust."

The rates relief scandal emerged when Liberal Democrats tried to make a similar application on their new political offices.

An inquiry was made by Burnley Lib Dems to the council about their base in Rosegrove but the party was told that it did not qualify.

Coun Sharon Wilkinson, British National Party leader in Burnley, added: "I don't know how they have got away with it for so long.

"I think that they should pay this money back because they have effectively got it under false pretences.

"They are making all these statements about council tax rises and the budget and they have been doing this all the time.

"That office of theirs is a business and it is open every day - can you imagine what would happen if the BNP did this - they would have us locked up."

A Burnley council spokesman said: "In 1990 when the Labour Party submitted a claim form to be considered for charitable relief, due to their political aims they were considered to have met the criteria for this.

"These were that they encourage membership from all areas of the community, and also that their aim was to significantly reduce or eliminate poverty.

"Following review, this was no longer deemed to be sufficient justification for continuing this relief."

Coun Peter Doyle, the council's finance executive member and Tory group leader, said: "This issue has been raised and will be looked into and my understanding is that this will be coming to an end."

Mrs Ussher said: "If there has been a change in policy by the council then I will comply with it.

"I have already offered to backdate the relief which has been offered since I became MP for Burnley."

A North West Labour Party spokesperson said: "The Labour Party has always paid the Council the rates it has been asked to pay. We understand that the Council has recently changed its policy and we respect its right to do so."

Steven Parkinson, a businessman who runs an antique business on the internet and from his shop in Standish Street, said questions needed to be answered over why the party got away with this for nearly two decades.

Mr Parkinson, who gets a 50 per cent rate reduction because his business only operates from one property, said: "If they have been getting this reduction by describing themselves as a charity It is unfair and wrong.

"I think it is only right they pay back the money and any interest.

"They should also investigate why it has taken 18 years to come to light.

"Kitty Usher has done a lot of things for the town and taken the right action by agreeing to pay the money back.

"The party could donate the money to charity and make a difference to people who really need help."

Under Government legislation charity shops and charity offices used to qualify for relief on their rates of 75 per cent.

In recent years this has increased to 80 per cent, according to Whitehall's own business rates website.