01/11/2011 07:49 GMT | Updated 31/12/2011 10:12 GMT

Jon Moulton, Venture Capitalist, Says He Was 'Mugged' When He Donated Cash To Help Liam Fox

A millionaire venture capitalist has complained that he was "mugged" when he donated money to help former defence secretary Liam Fox.

Jon Moulton said Dr Fox had personally invited him to help fund Pargav, a not-for-profit company run by his close friend and self-styled adviser Adam Werritty.

But, he told BBC2's Newsnight, the money was not used for what he was told it would be.

Dr Fox resigned as defence secretary last month over his controversial links with Mr Werritty, who accompanied him on trips and in meetings all over the world.

Pargav appeared to have been used to help fund Mr Werritty's jet-set lifestyle in which he effectively acted as an unofficial adviser to Dr Fox.

Mr Moulton said he had previously given money to Dr Fox's "back office" when the Tories were in Opposition and had been pleased with the results. He said it had been "quite successful at generating good policy documents and good policy work".

But he went on: "Liam then asked me to put money in the same general direction.

"I was at great pains to get written assurances as to what it was used for, which bore absolutely no resemblance to what it was used for.

"I can definitely say that I was mugged. In fact, if you look at the dictionary, the definition of 'foxed' is 'discoloured with yellowish brown staining', and I fear it might be reasonably appropriate."

Mr Moulton said he felt damaged by the association with the affair, adding: "It was a relatively small amount of money, gone, very publicly and very definitely wasted."