Mr Harding asked a mutual acquaintance, Paul Potts, then deputy editor of the Daily Express, to introduce him to Alastair Campbell, Mr Blair's press secretary, because he admired what the new Labour leader was doing. Mr Potts, who became editor of the Press Association last year, duly introduced them last summer.
A round of glad-handing followed, with Mr Harding meeting Mr Blair at a number of dinner parties. "Basically, he said he was interested, and wanted to help," a Labour source said.
Yesterday's disclosure of the donation, however, was a leak. It had been hoped to announce two other donations first - of about pounds 500,000 apiece - and then make the Harding announcement during the October party conference, at a time of maximum exposure. The Labour source said however: "To us, this is gold dust."
Brian Mawhinney, the Conservative Party chairman, said: "The truth is, only millionaires could afford a Labour government." He added: "We do not reveal who gives us money and it is up to donors to decide if they want publicity."
Mr Harding's cash will help to finance 2,000 posters to go up next week, as a counter to the latest Tory "red-eye" campaign, "New Labour, New Taxes".
Five Labour posters will press home the party's key commitments, on low inflation and prosperity, smaller junior school classes, jobs for the under-25s, NHS waiting lists and punishment of young offenders.
The fact that Mr Harding is a self-made business success, and vice-chairman of John Major's favourite football club, undoubtedly sweetened Labour's coup - and added to Conservative discomfort in a week when Labour was "selling" its softer image to business.
Mr Harding, whose pounds 150m fortune was made on the Lloyd's insurance market, said in a statement: "I believe that Tony Blair is the best leader for our country and New Labour the best party to prepare our country for the future.
"I want to help Tony and the Labour Party to bring about change in this country."
He added: "I have never believed that being wealthy means being Tory and I think New Labour has a far greater understanding of the enterprise economy than many people in the Tory Party do."
Yesterday, the first instalment had hardly arrived before being used to finance Labour's latest poster campaign, to be unveiled by Tony Blair in his Sedgefield constituency today.
The donation follows the disclosure last weekend that pounds 1m has been pledged by the International Fund for Animal Welfare.Reuse content