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Fugitive multi-millionaire fraudster and Liberal Democrat donor Michael Brown is set to face an extradition hearing in Spain early next week.

Brown was arrested in the Dominican Republic in January and flown to Madrid yesterday where he was in the process of being handed over to British officials.

He fled the UK to the Caribbean after being convicted of fraud at Southwark Crown Court in 2008 and was sentenced in his absence to seven years in jail.

He was detained in the tourist town of Punta Cana over an unrelated fraud charge.

A City of London Police spokesman said: "Michael Brown was deported from the Dominican Republic and landed in
Madrid on Saturday morning, accompanied by officers from the Dominican Republic.

"City of London Police will be taking the appropriate steps to bring him back to the UK, via a European Arrest Warrant."

Detective Superintendent Bob Wishart said: "The City of London Police is pleased that after four years evading British justice, Mr Brown is a step closer to returning to the UK to start his prison sentence.

"We hope that him facing justice will bring some closure to the victims who suffered as a result of his frauds."

A spokesman for the Serious Organised Crime Agency (Soca) said: "The process would be for an individual to be taken to Madrid for an extradition hearing.

"Once that extradition is agreed there's a 10-day period for him to be extradited to the UK. We would expect the process to start early next week."

Brown donated about £2.4m to the Lib Dems ahead of the 2005 general election, its largest donation to date.

He had been living on the Caribbean island under the name of Darren Nally, officials in the Caribbean said.

An international manhunt was launched when Brown went on the run after stealing nearly £8 million from the former chairman of Manchester United.

He posed as a highly successful bond dealer and claimed connections with royalty to steal the money from Martin Edwards.

He secretly used investors' money to fund the record donation to the Lib Dems' election war chest and also blew a large slice of his ill-gotten gains on an "extravagant" lifestyle.

Dominican police said Brown was also charged with defrauding people in Punta Cana, but the alleged victims dropped their complaints so he could be extradited.

An Electoral Commission inquiry in 2009 found the Lib Dems accepted the fraudster's donation in good faith and cleared the party of all wrongdoing.

A Lib Dem party spokesman said: "We completely welcome any further steps to bring this man to justice."