HOPES were rising last night that legal action may yet be averted in the latest row to erupt in Your Party, the new left group launched by Jeremy Corbyn and Zarah Sultana.

The Guardian had been briefed that the party was threatening such action against three of its most prominent supporters — former Labour MP Beth Winter, ex-North of Tyne mayor Jamie Driscoll and anti-corruption campaigner Andrew Feinstein, who challenged Sir Keir Starmer in his Holborn & St Pancras seat at last year’s election.

They are directors of a company, MOU ltd, holding around £1 million in party funds raised both from its initial launch and the membership system unilaterally and controversially promoted by Ms Sultana last month.

But it was hoped that a resolution was in sight last night. 

Ms Sultana called the leak “inaccurate” and said in a statement: “The MOU directors were already in the process of transferring ownership and all of the resources of MOU, and that legal process is now nearing completion. 

“I am taking on the role of director of MOU to see this through and ensure we’re ready for the conference at the end of November. 

“The movement owes Jamie Driscoll, Beth Winter and Andrew Feinstein a debt of gratitude for their integrity, professionalism and hard work. 

“They’ve been patient, constructive and consistently sought to resolve matters diplomatically.

“This brings the chapter to a close and these resources will be used for Your Party, as was always intended.”

Negotiations for the transfer of the funds and data, agreed to in principle by all concerned, had stalled amid mutual recriminations.

Mr Corbyn and Ms Sultana were both dismayed that the legal threat was publicised in the media in another self-inflicted wound and were committed to resolving the issue privately.

Your Party sources claimed that the three directors had been withholding the money in bad faith, for purposes of political leverage, leaving no alternative to legal action. 

The MOU trio disputed this and in turn allege the party was proposing courses of action in potential breach of insolvency and data laws.  

Differences within the Independent Alliance group of MPs, presently stewarding the party’s launch, were also cited.

The latest example of the new party’s imposing capacity for self-sabotage risks further sapping the enthusiasm which attended its original announcement.

One prominent figure associated from the beginning told the Star: “I am walking away from it. I do not want to work with these people anymore.”

Ms Sultana said this week that she was not ruling out running for the party’s leadership when its structures were established early next year.

Rules and constitution are set to be agreed by a founding conference in Liverpool next month, an event being preceded by regional assemblies of the party’s members.

Membership figures have not been announced by Your Party, but they are understood to be no more than 5 per cent of the 800,000 who originally expressed support.