A controversial Conservative peer has promised to pay up to £5m towards a royal yacht, it emerged on Friday. Lord Ashcroft, who has given more than £10m to the Tory party and is now a government adviser, said he would fund a replacement for Britannia, decommissioned in 1997. The former deputy party chairman, 65, told the Daily Mail he would donate the money as part of a plan to give away much of his fortune before he dies. "The nation lost a wonderful asset in 1997, and talk at the time of replacing her with another royal yacht quickly seemed to disappear," he said.

David Cameron has endorsed the idea of a yacht after lobbying from the higher education minister David Willetts and the education secretary, Michael Gove. The idea, at one point described by Gove as a gift from the nation to the Queen on her diamond jubilee, also has the backing of the Prince of Wales and Princess Anne, according to letters sent to the prime minister by Willetts.

The £60m yacht has so far found another £10m in backing from financial leaders in Canada.

The pledges come despite a storm of protest after the Guardian revealed ministers had discussed taxpayers paying for the yacht as a present to the Queen – prompting critics to accuse the government of being out of touch with the nation's economic priorities.

Ashcroft has previously been criticised for failing to admit that he was not domiciled in the UK for tax purposes for nearly a decade after he received a peerage. Rajeev SyalThe political honours scrutiny committee repeatedly made it clear that Ashcroft's elevation was dependent on him giving a promise that he would return to the UK and become a UK taxpayer. The peerage was agreed after Ashcroft gave a "solemn and binding undertaking" in writing that he would become permanently resident in the UK. Instead of becoming a permanent resident, however, he became a "long-term resident" – a distinction that allowed him to avoid paying UK income tax on all his worldwide earnings.

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