The bequest is the biggest to the university from an individual since the 1930s, when Lord Nuffield gave the equivalent of pounds 77m at today's prices to set up the school of medical science.
The announcement was delayed until yesterday to allow Mr Said's son to complete his three-year degree course at the university.
Mr Said, a friend of the Saudi Arabian royal family and of the Thatchers, made his money in construction and development, and as an international "Mr Fixit" who introduced Western companies to contacts in the Middle East.
He came to public attention because of his alleged involvement in the pounds 20bn Al-Yamamah arms deal with Saudi Arabia, from which Mark Thatcher is said to have profited by pounds 12m. However, he said he made no money from the deal and denied that he smoothed the way for Mr Thatcher. He has pointed out repeatedly that he is not an arms dealer.
He is a friend and business associate of Jonathan Aitken, the former defence and Treasury minister. He owns a string of successful race horses, two of which this year won the 1000 Guineas and the English Oaks. Each year he contributes thousands of pounds to charity.
Yesterday Mr Said, who has a 3,000-acre estate in Banbury, Oxfordshire, pointed out that his father had founded Damascus University in Syria and declared that his gift to Oxford was the result of his warm feelings for Britain.
He has already given money for scholarships at Oxford and has contributed towards the Margaret Thatcher conference centre at Somerville College.
The new Said Business School will aim to compete with the best in the world, including Harvard and Stanford in the US. There will be 500 students including 150 on Master of Business Administration courses from Britain, Europe, North America and the Pacific Rim. The school will be situated on the University Club's playing fields, if Oxford city council gives planning permission, and should be ready by the autumn of 1998. The first MBA course is already oversubscribed. The university aims to raise a further pounds 20m to pay for staff costs.
Lord Jenkins of Hillhead, the Chancellor of the University, said the school would be a milestone, proving that the university could raise funds to keep it in the top international rank. "As no government seems likely to provide enough funds to renew and maintain that position, we have to do it ourselves," he said.
Mr Said said: "Management education is a vital part of what makes a nation economically competitive. I am convinced that the new school will be a world leader and will attract the brightest and the best. It will provide an excellent grounding for future business leaders from all round the world and will be an ambassador for British business."
A university spokesman said that the ethics committee, which was representative of the university, had examined the gift and had given its seal of approval. "Everything he has done has been legal and above board and the donation is completely acceptable," he said.Reuse content