One of Labour’s biggest individual donors has offered rebels millions of pounds to defect and create a new movement over fears the party can never recover from Jeremy Corbyn’s leadership.

Dr Assem Allam, who has given more than £500,000 to Labour, told The Telegraph that the party had become a “joke” under Mr Corbyn and can no longer provide “strong opposition”.

The businessman and owner of Hull City Football Club said he is ready to fund a “Gang of Four” style defection, a reference to when senior Labour figures dramatically quit the party to create the Social Democratic Party (SDP) in 1981.