The pledge makes Mr Harding Labour's largest-ever individual donor. He said he had decided to give the money because Labour's emphasis on education, training and long-term investment made "absolute sense".
"I want to put something back into this country," he said. "I hope I can show people that it is possible to get on and be wealthy but still believe in the things I always believed in, and help the party that wants all the people to get on and do well."
The latest and most spectacular business endorsement of Tony Blair is also the most painful for the Prime Minister, who is a Chelsea fan. Mr Major often sits in the directors' box as a guest of Mr Harding and Chelsea chairman, Ken Bates.
News of the pounds 1m donation comes just days after the revelation that Labour last week received the same amount from an animal welfare pressure group, Political Animal Lobby.
Mr Harding backed the Labour leader this week, saying: "As Tony said yesterday, it is unhealthy for our political life that one party should be supported by business and the others not. I have never believed that being wealthy means being Tory."
Mr Harding met Mr Blair earlier this summer, but a donation was not discussed, a Labour spokeswoman said. The news of his gift is part of a tightly controlled programme of announcements of high-profile endorsements and donors.
Mr Harding, who hit the headlines during a power struggle for the control of the club, made his fortune in the reinsurance business. His City-based company Benfield has grown rapidly in recent years. He is described as the chairman-in-waiting at Chelsea and is expected to take over the club when Mr Bates retires. .
Other major donors to Labour in 1995 include millionaire publisher Paul Hamlyn, who was reported in July to have given pounds 600,000 towards Labour's pounds 1m campaign for the Road to the Manifesto. Millionaire DIY entrepreneur and former owner of the New Statesman and Society magazine Philip Jeffrey, reportedly gave a pounds 300,000 state-of-the-art computer system. Pearson plc, the publishing and information group and owner of the Financial Times newspaper, said in February last year that it was the first British public company to make a substantial donation - pounds 25,000 - to Labour. Tate and Lyle plc last October cut donations to the Tories from pounds 25,000 a year to pounds 15,000, to give pounds 7,500 to Labour and pounds 2,500 to the Liberal Democrats.Reuse content