Former Tory donor Arron Banks ups his Ukip donation to £1million following William Hague 'nobody' comment

Arron Banks was initially giving £100,000 to Ukip but after William Hague's speech he has increased this ten fold

The former Tory donor and multi-millionaire Arron Banks has announced he is upping his Ukip donation to £1 million to spite the Conservatives, after William Hague made a joke at his expense.

Mr Banks' announcement, made alongside the Ukip leader Nigel Farage, came as David Cameron delivered a blunt warning to disillusioned Conservatives that a flirtation with Ukip at the next general election could lead to a Labour government.

Mr Farage's riposte came just hours later, when Mr Banks explained he had decided to increase his donation from £100,000 to £1 million pounds after William Hague, the Leader of the Commons, dismissed the significance of his defection.

Mr Banks, who runs the insurance company Go Skippy, has previously funded the Tories to the tune of £250,000, Ukip claimed, although that figure was disputed by the Conservatives.

Mr Hague had told the BBC: "I have never heard of him, so we are not going to get too upset about that."

"It’s certainly not going to overshadow the Prime Minister’s speech today that someone we haven’t heard of has gone to Ukip."

The huge donation was the latest in a series of announcements by Ukip designed to disrupt the Tories’ final party conference before the general election.

Over the weekend Mark Reckless followed fellow MP Douglas Carswell in jumping ship and triggering Commons by-elections and speculation dogged the conference that a third Tory MP could be about to follow suit.

Explaining his decision to increase the donation, Mr Banks told reporters he “woke up this morning intending to donate £100,000 to Ukip”.

“I understand Mr Hague called me a… nobody, so in light of that and in view of the fact that I’m a strong advocate of leaving the European Union, I’ve decided today to donate £1 million to the party and not the £100,000 we originally agreed,” he said.