The claims, by Bantu Holo-misa, the country's former Tourism Minister, who was sacked last week, have led ministers to take the unprecedented step of instigating legal action against a former political colleague.
Thabo Mbeki, the Deputy President, and Steve Tshwete, the sports minister, have served lawyers' letters on the former minister, warning him to stop repeating "spurious, untrue, and defamatory remarks".
Mr Holomisa claims that Sol Kerzner paid for Mr Mbeki's 50th birthday party in 1992 and that Mr Tshwete accepted Mr Kerzner's offer of free accommodation at Sun City, South Africa's Las Vegas, last year.
On Friday, Mr Holomisa, who is a popular figure within the ANC claimed that President Mandela himself had called him to Johannesburg's Carlton Hotel in 1994 to brief him about a 2 million rand donation to the party coffers from Mr Kerzner and to discusss the possibility of dropping bribery charges made against Mr Kerzner in Transkei.
The escalating row now threatens the unity of the ANC itself.
Meanwhile, the National Party is demanding an immediate investigation. It is linking Mr Holomisa's dismissal with the bid to oust Patrick Lekota, prominent ANC figure and Free State premier, as part of a conspiracy to stop the two men exposing corruption in the ANC and government.
ANC officials have denied Mr Kerzner paid for Mr Tshwete's hotel bill or Mr Mbeki's birthday party. But they refused to comment on the alleged multi-million rand donation.
Last week, an ANC spokeswoman said that donations were the party's private business and the privacy of donors had also to be respected.
"They say I am lying," said Mr Holomisa. "But so far no one has denied the meeting with the President."
Mr Kerzner was reported by Business Sunday last weekend to have offered the Conservative party a pounds 6m donation for British citizenship. Mr Kerzner, speaking from his holiday home in the South of France, this weekend denied funding Mr Mbeki's party or making a two million rand donation to the ANC and promised legal action against Mr Holomisa. But he did not deny making any ANC contribution.
"What I contribute is my business," he said. "And I have never contributed to any cause in return for favours."
Yesterday, Mr Holomisa remained defiant, inviting ANC officials to see him in court. "I will stand by [what I have said] in any court."
He is also threatening to take the ANC to the Supreme Court to state its reasons for sacking him.Reuse content