A victory for Jeremy Corbyn in the Labour leadership race could lead to the break-up of the party, one of its biggest donors has warned.
Entrepreneur John Mills said a win for the left-winger could lead to donations from wealthy backers drying up and ultimately result in a split in Labour like the one that led to the creation of the SDP in the 1980s.
His comments came amid bitter recriminations at the top of the party after an opinion poll put Mr Corbyn on course for a shock victory and the socialist candidate continued to pick up support from local Labour parties.
Mr Mills, who founded the JML home shopping firm, told the Guardian: "If Corbyn won, I suspect what would happen is that there would be some sort of split. Then you would have an SDP-type party."
He predicted that some donors would stop funding Labour, although he acknowledged there could be more support from the trade unions.
"The Labour party has a spectrum of donors," he said. "I suspect that some of the major donors would be less likely to give, and so the amount of donations would go down. But at the same time donations from trade unions could go up."
Mr Mills has previously spoken out in support of Liz Kendall, who has come under pressure to stand aside in the contest to help block the growing challenge from Mr Corbyn.
The shadow care minister insisted she will fight to the very end and warned that a victory by the veteran backbencher would be a "disaster" for the party.
Ms Kendall is reported to be under pressure to quit the contest to allow the moderate vote to rally behind one of her two centrist rivals – Andy Burnham and Yvette Cooper.
Party grandee Lord Mandelson warned that Labour's future as a viable party of government was under threat.
But former deputy prime minister Lord Prescott rejected the bleak predictions for Labour if Islington North MP Mr Corbyn became leader and said it was Tony Blair's invasion of Iraq which had undermined support for the party.
He said the former prime minister's suggestion that anyone whose heart told them they should back Mr Corbyn should "get a transplant" was "totally unacceptable".