Graham Spurling, who made millions through his Pet Protect insurance company, has put up the money as a "float" for a number of projects to get the party back on its feet, sources said.
The party has engaged a direct marketing agency, Claydon Heeley, to do the work for it. Initiatives to increase membership will include a party political broadcast and advertising campaign, launched yesterday, and direct mail campaigns.
Claydon Heeley has already sent out mailshots to members of the Countryside Alliance and shareholders of privatised utilities on behalf of the party. The company is also helping to set up a centralised membership database for the Conservatives.
News that the party's latest operation is again being paid for by one of its treasurers - two other senior treasurers are believed to have underwritten the pounds 300,000 cost of its recent ballot on the euro - came as William Hague, the party leader, pledged to turn the Tories into an "ambitious party" again. He promised to double the membership by 2000.
Mr Hague is aiming to boost the Conservatives grassroots' strength from about 330,000, where it stood earlier this year at the time of its organisational reforms, to 660,000.
"We are going to reach out directly to all parts of the country that have had little or no Conservative presence for a number of years," Mr Hague said.
"There are simply hundreds of thousands of British people who share our beliefs but have simply never been asked to join our party."Reuse content