Labour's candidates in the Blaenau Gwent by-election spent nearly £100,000 more than the two independent candidates who defeated them.
Dai Davies and Trish Law defeated Labour at the by-election
Figures from the Electoral Commission show Labour's Owen Smith and John Hopkins spent just under £113,000.
Independents Trish Law and Dai Davies spent just over £13,000. They said it was like a "David and Goliath battle".
But Welsh Labour said the money showed how it tried to rebuild its links with the traditional Labour stronghold.
Calculations show that Labour spent £5.82 for every vote it got compared with the 51p spent for each vote by the independents.
Trish Law and Dai Davies are the widow and former agent respectively of Peter Law, the independent who left Labour and stood successfully against it in the 2005 General Election after a row over selecting candidates from an all-women shortlist.
They stood for the seat of AM and MP for the area after Labour admitted it had made a mistake and began a high profile campaign to win back the seat in the double by-election in June.
But votes showed that the people of the area were disenchanted with Labour and despite the money that poured into their campaign, they were unable to regain their former stronghold.
Out of the £113,000 used by Labour, their main expenditure was £40,000 split between the two candidates providing staff for mail shots and canvassing.
They spent nearly £11,000 for accommodation for party workers, a further £8,500 for leaflets and £600 for helium balloons.
The independents main expenditure was also on leaflets - nearly half of their £13, 000 went on buying 180,000 leaflets. But they spent several hundred pounds on balloons and gas as well.
A Welsh labour spokesman said: "We took the challenge of rebuilding our relationship with the people of Blaenau Gwent extremely seriously. The amount of resources spent in the election reflects that."
But Dai Davies, the independent who defeated Labour's Owen Smith in the contest to be Blaenau Gwent's MP, said: "They thought they could buy success. But they couldn't buy success.
'David and Goliath'
"It's really sad. This area needs new businesses. What it doesn't need is £100,000 spent on an election. Would it have been well spent even if they had won?
"That's what you call David and Goliath."
His comments were supported by Trish Law who became the area's AM.
"It also shows that fighting elections is not about how much money you've got but how much work, effort and commitment you're prepared to expend on the ground," she said.