David Cameron faced embarrassment last night after a multimillionaire former tax exile recruited to raise money for the Conservative Party resigned before even starting the job.
David Rowland, whose family has an estimated fortune of £730m, returned from Guernsey last year to donate almost £3m to the Tories in the run-up to the general election.
His appointment in June as treasurer, with the task of refilling party coffers depleted by the campaign, sparked a flurry of accusations about the business affairs and private life of the notoriously publicity-shy property magnate.
Mr Rowland, the son of a scrap-metal dealer who left school without qualifications, became a tax exile in the late 1960s after making his first million in property dealing by the age of 23.
He went on to build a vast corporate empire founded on company acquisitions. His involvement in a takeover of the Scottish football team Hibernian in the 1980s led to him being described in a Commons motion as a "shady financier".
In a brief statement issued by Tory headquarters he confirmed that he had decided not to take up the post, which was due to begin in October.
"Unfortunately my developing business interests mean I will not have the time to give that role the focus and attention it deserves," he said.
Mr Cameron has endured uncomfortable headlines in recent months over his links with wealthy business figures and there will be fresh questions over whether Tory chiefs examined the background of their millionaire recruit in sufficient detail.
Liberal Democrat MPs have demanded an investigation into the tax affairs of the billionaire Topshop boss Sir Philip Green – who handed ownership of his hugely profitable fashion empire to his wife, who lives in Monaco – after he was appointed as an efficiency adviser to the Government.
And during the election campaign the Conservatives faced repeated challenges over the tax status of their former treasurer, Lord Ashcroft, following the disclosure that he was a so-called "non-dom".
Conservative sources and friends of Mr Rowland said he made the decision not to accept the post entirely on his own and had not been put under any pressure by the party's high command.
They added that he had recently bought a bank in Luxemburg and the acquisition was taking more of his time and energy than he had anticipated.
He now jointly controls his business interests with his son Jonathan. According to the Sunday Times Rich List, the value of his interests grew by £100m in 2009 alone.
Mr Rowland, 65, who once paid £20,000 for a portrait of the Prime Minister David Cameron, became fully domiciled in Britain in advance of the election, enabling him to make donations to the Conservatives totalling £2.7m.
He stressed yesterday that he would remain a "deeply committed" supporter of the party. He added: "David Cameron is a great leader of the party and of our country and I will continue to actively support him and the party in the years ahead."
A spokesman for the party said: "We understand Mr Rowland's reasons for not taking up the role and remain grateful for his support."
But the Labour MP John Spellar MP said: "To lose one Tory treasurer with question marks over his tax affairs might be regarded as a misfortune, but to lose two looks like carelessness. What is it with the Tories that they keep picking people with questions over their tax affairs – and what do their Lib Dem allies make of all this?"
Lord Oakeshott of Seagrove Bay, a Liberal Democrat treasury spokesman, said: "It must be right for any British people in prominent positions in public life to be firmly resident and domiciled in the UK for tax purposes." Stanley Fink, who is currently the Conservatives' co-treasurer with Michael Spencer, will continue as sole treasurer when Mr Spencer steps down after the Tory conference in October.