The election of Jeremy Corbyn as Labour leader could trigger an SDP-style split in the party, one of the party’s biggest donors has said.

John Mills also said victory for the leftwinger could lead to donations from wealthy supporters drying up, although he conceded that funding from the trade unions could increase if Labour morphed into a party of the far left.

A donor to the Kendall campaign, Mills said: “If Corbyn won, I suspect what would happen is that there would be some sort of split. Then you would have an SDP-type party.” Mills gave Labour £1.6m in shares in his TV shopping and consumer products company during Ed Miliband’s leadership.

The prospect of Corbyn winning had been largely dismissed as a fantasy until a YouGov poll of Labour members and supporters on Tuesday night showed him easily ahead of his three rivals on first preferences and on course to beat Andy Burnham in the final round by 53% to 47%, following the elimination of Liz Kendall and Yvette Cooper.

The findings electrified what had been widely dismissed as a dull and lacklustre contest, and, with alarm spreading through the Labour establishment, senior figures started feuding publicly about the implications of the Corbyn surge.

Facebook Twitter Pinterest Labour candidates Liz Kendall, Yvette Cooper and Andy Burnham are asked whether they would serve under Jeremy Corbyn

Mills warned that there would be an impact on donations too, but stressed he would be minded to stay loyal to Labour even if Corbyn turned it into a substantial far-left party, like Die Linke in Germany.



“The Labour party has a spectrum of donors,” he said. “I suspect that some of the major donors would be less likely to give, and so the amount of donations would go down. But at the same time donations from trade unions could go up,” said Mills.

John Mills, one of Labour’s biggest donors.

Kendall said that a Corbyn victory “would be a disaster” for Labour. She was backed by the Blairite former health secretary Alan Milburn, who said: “I’m afraid history tells a very brutal lesson about what happens when Labour lurches to the left.

“You are out of office, not for five years or 10, but for very many years to come. Now, if the Labour party really does have a death wish, then that is where it will go.”

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Corbyn, whose uncompromising anti-austerity stance seems to be particularly inspiring to the tens of thousands recently joined Labour members and to trade unionists signing up as affiliates to take part in the contest, also came under attack from the Labour MP John Mann over his record on child abuse allegations.

In a long letter published on his website, Mann claimed Corbyn had been too complacent when allegations were raised about abuse in children’s homes in Islington, where Corbyn is an MP. “The so-called ‘trendy left’ politics of the early 1980s was a contributory factor in covering up child abuse,” Mann said.

A spokesman for Corbyn said Mann’s attack was “a new low” in the campaign. Corbyn had a long record of standing up for his constituents and had demanded an independent inquiry into abuse in Islington, the spokesman added.

Corbyn also received qualified backing on Thursday from the former deputy prime minister Lord Prescott. Although Prescott is supporting Burnham, he said Corbyn was “a great guy” and that his victory would not be a disaster for Labour.

Prescott strongly condemned the former Labour prime minister Tony Blair for saying Labour supporters whose hearts were telling them to vote Corbyn needed a transplant.

“I have a lot of respect for Tony Blair, I worked for him a lot of years, but to use that kind of language is just abuse,” said Prescott. “The Labour party is about the heart, as well as the head, and to suggest somebody should have a transplant if they are making decisions by the heart is totally unacceptable.”

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The peer, who largely managed to keep his disagreements with Blair private during the 10 years he served as deputy prime minister, said the former PM should also remember that it was the Iraq war that was stopping people voting Labour.

Meanwhile, Andy Burnham’s position in the contest was strengthened by an Ipsos Mori poll showing that he comes top when people are asked whether the four candidates have what it takes to be a good prime minister.

Among Labour supporters, his net score is +24 (those who agree minus those who disagree), Cooper is on +12, Corbyn -8 and Kendall -12.

But among the public at large, Burnham’s net score is zero (because the 27% who say he could be a good PM match the 27% who say he could not). Cooper’s net score is -12, Kendall’s -14 and Corbyn’s -19.

In his interview, Prescott was even more critical of John McTernan, a former aide to Blair in No 10 and Jim Murphy’s chief of staff when Murphy was Scottish Labour leader. McTernan claimed on Newsnight that the Labour MPs who nominated Corbyn just to allow him to take part in the leadership contest were “morons”.

Facebook Twitter Pinterest John Prescott on Blair’s intervention

Prescott said: “Who the heck is John McTernan? He advised in Scotland, and we lost. He advised in Australia, and we lost ... He has no authority.”

Prescott also criticised Harriet Harman, the acting Labour leader, for her handling of the party’s approach to the welfare bill vote on Monday night. Harman ensured that Labour MPs were ordered to abstain on the main vote. But Prescott said this was “silly”, and that she had no right, as interim leader, to settle policy on such an important issue.

Describing the affair as a mess, he said: “It was a decision made by Harriet. She had no authority to make it. The shadow cabinet was against it, the PLP [parliamentary Labour party] was against it. I think Harriet got it wrong.”

In a rare intervention in recent UK politics, David Miliband, who was narrowly beaten by his brother Ed in the 2010 leadership contest, predicted that ordinary Labour members would reject Corbyn’s approach.

“I continue to have enormous faith in the common sense of Labour party members. They see a lot of what the Tories are doing and they know the need for Labour to be a credible alternative,” he said.

“Those Labour party members have seen that at two elections the electorate have sent a very clear message to the Labour party, which is that it needs new ideas, not old ones, and I think that in the course of the leadership election campaign you’ll see that case for new ideas, not old ones, being made.”

Lord Mandelson, another senior party figure from the Blair years, said that the current leadership turmoil reminded him of the 1980s and that the entire future of the party was at stake.

“Those of us who stayed and fought to save the Labour party in the 1980s will be experiencing a growing sense of deja vu,” he said. “The last five years have left us with a terrible legacy to overcome with the existence of the Labour party as an effective electoral force now at stake.”