A mystery backer funded the volunteer scheme for overseas students working on Labour's campaign - and even Labour does not know who it was or how much was involved.

Matt McCarten, who set up the scheme and ran it under his "Campaign for Change" organisation, told the Herald it was funded by a "private funder" who thought the scheme was a good idea.

It is understood Labour itself still does not know who that funder is or how much was spent on the programme and it has been left to cover some of the costs of housing the interns at Awataha Marae, although McCarten said he believed the payments were up to date.

McCarten's confirmation of a "private funder" followed the release of a document obtained by Newshub which showed McCarten expected it to cost at least $150,000 and planned to get $100,000 from the FIRST and Unite unions, as well as seeking contributions from other unions and fundraising.

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However, those unions said yesterday they had not put any funding in.

Labour's General Secretary Andrew Kirton took over the programme this week after concerns about how it was being run and the ability to manage the numbers involved.

He would not comment on the funding issue, saying he was still working on taking care of the interns and "sorting the mess out".

Labour will also have to consider whether it needs to declare any contributions to the costs of the programme as a donation.

Electoral law expert Graeme Edgeler said it would have to if it was a Labour Party programme, but it probably would not have to if it was a third party campaigning for Labour.

It was advertised as a "Labour Party Fellowship", involved Labour MPs, and was set up by McCarten while he worked for Labour until May - but was run by his Campaign for Change.

Labour leader Andrew Little said the party would disclose anything it was required to and would ensure third parties did as well. However, the party was still working out what funding there was in place.

The interns are now being sent home or billeted out around the country and about 20 who were yet to arrive had been told their places were cancelled - some just days before they were due to arrive.

The interns on the programme paid for their own flights and any personal domestic travel, but the programme covered the accommodation and meals as well as intern-related travel costs. In total, about 100 interns were expected to take part between the end of May up until election day, with most leaving by August.

Interns have given mixed reviews - yesterday one told the Herald that much of the attention had been on the standard of accommodation, but that had not been the problem or the reason Labour officials had to step in. Nor had complaints by individual interns.

"There was never a 'rebellion' over housing conditions; what sparked anger from interns was learning that the programme that had been advertised as a Labour Party Fellowship was largely operating without any guidance from the Labour Party."

She said it was clear early on that the programme was disorganised, had not sorted out its funding and could not handle the numbers of interns accepted. One intern had been told to work out a finance plan for the programme after the interns had already arrived.

Basic organisation such as transport to events was not in place - and they had to hire rental cars and even considered buying a cheap used car to get around.

She said she was pleased with the overall experience and upset it had to end early, but it was obvious it was a "ticking time bomb" and the party had to step in.

"There's pushback from many who feel it shouldn't have been shut down so quickly, but I really don't know how much longer it would have lasted, especially since the whole programme was labelled 'Labour', without clear connection to Wellington. It was a ticking time bomb until Wellington found out and shut it down. That's ultimately why it was shut down - it had Labour's name all over it, but Wellington had no control over the situation or even knew many details about it."

CTU Secretary Sam Huggard said McCarten had approached them and they had asked for a written proposal to consider, which had never arrived.

Unite's National Director Mike Treen said the union had taken part in the programme and planned to use the interns for an programme to enrol Unite members, but had not provided any direct funding.

"Matt is ambitious, and where there is a will there is a way is often his attitude. He may have tried to reach too far in this case. We thought there were positives and are a little bit sorry to see it's all fallen on its face."

Act's David Seymour and Immigration Spokesman Michael Woodhouse have also questioned whether the scheme breached employment laws. A spokesperson for the Labour Inspectorate said only that it had received some information and "acknowledged that".

Last year the Labour Inspectorate issued a warning after an investigation last year into the use of "volunteers" for work in return for accommodation and board.

That followed complaints about schemes such as WWOOF (Willing Workers on Organic Farms) and other businesses offering accommodation and meals in return for work.

Unite Union's Mike Treen said unpaid interns were common around the world. "It's stupid to call it 'employment.' I know the difference between people being taken advantage of and volunteers and being looking to be political agents in the long term. It was probably a very useful experience for many."