Lakshmi Mittal, prominent Indian-origin industrialist and Britain's richest man, has offered the ruling Labour party a donation of two million pounds to rescue the party's precarious financial situation.
The party is reported to be facing "financial ruin" due to the ongoing investigations into the cash-for-honours scandal. The party has been accused of offering peerage and other honours in return for hefty donations from businessmen, including two of Indian origin, Gulam Noon and Chai Patel.
According to the Sunday Times, the donation from Mittal has been negotiated by Prime Minister Tony Blair and his advisor Lord Levy, who is currently on bail having been arrested as part of the police investigation into the cash-for-honours scandal.
Mittal was in the news in 2001 when the British media reported that Blair had backed one of his business deals following a previous donation of 125,000 pounds.
The latest donation is expected to attract criticism from Labour backbenchers and others. The Times reported that senior party figures were now worried that disclosure of Mittal's donation may lead him to withdraw it.
Mittal, whose fortune was valued at more than 14 billion pounds in last year's Sunday Times Rich List, controls the world's biggest steel company and is seeking to diversify into oil and gas.
The paper reported that Mittal was negotiating to take a stake in a multi-billion-barrel oilfield in Kazakhstan. Lord Levy is Blair's "special envoy" to the country.