Tony Blair has flung himself back into the political fray, after it was revealed he organised a deal to secure Labour up to £1m of funding if it gets on the wrong side of its Unite donors.

Blair set up a dinner at his home last week, at which Hull football club’s chairman, Assem Allam, agreed to donate an extra £300,000 to Labour, a sum that would take his total donations to the party’s electioneering to £500,000. If Labour loses the backing of union Unite, Allam said, he would donate a further £500,000.

Blair ha come under fire for his brokering, with MPs loyal to Unite claiming his behaviour was “underhand” and would cost the party seats.

Labour’s relationship with both UK business and Unite is seemingly on a knife edge. Before the dinner Allam said that Labour’s attitude to successful businessmen is “they should go away and die”.

According to the Times, after the meeting Allam said:

I want to see a strong Labour party less reliant on trade union money, so I have said if you have any problem with the Unite money I will make my donation £1m. As I have always said to our friends in the Labour party, Tony Blair and Ed Miliband, I would increase my political donations to gradually reduce the Labour party’s financial reliance on the trade unions. I hope I can inspire other like-minded business people to do the same so that the Labour party can stand on their own without having to satisfy one paymaster.

Meanwhile Unite chairman Len McCluskey wants Labour to name Karie Murphy, a Unite activist who was implicated, but cleared of wrongdoing, in the Falkirk vote-rigging scandal, on the shortlist of candidates for the Halifax constituency. Miliband is less than keen on the idea, and some fear that Unite could pull its £1.5m in funding in protest, a possibility the union strongly denies.

Labour MPs who are members of Unite see Blair’s involvement as an underhand attempt to undermine the influence of Unite.