One of Australia’s biggest political donors, Huang Xiangmo, has been denied re-entry into the country after his bid for citizenship was blocked and his permanent residency was cancelled, leaving him unable to return to his Sydney home.

Huang, who rose to public notice after donating nearly $3m to Australia’s major political parties, had his application for Australian citizenship turned down, the Sydney Morning Herald reported.

The paper also said Huang’s permanent residency had been cancelled and the home affairs department had cancelled his Australian passport while he was out of the country. Huang, who founded the Chinese property developer Yuhu, has not been able to return to his multimillion-dollar Mosman home where he has lived with his family since 2011.

In a statement, Yuhu Group Australia said Huang “no longer holds any position at the company, is not involved in day-to-day operations, nor does he hold any shares”.

The department, the prime minister’s office and Huang have been contacted for comment.

In late 2017 the Labor senator Sam Dastyari was forced to resign after a series of revelations about his contact with Chinese donors after it emerged he had warned the Communist party-linked Huang in 2016 that he was probably under surveillance by government agencies.

The ABC revealed Dastyari’s office had asked the then immigration department – now part of home affairs – about Huang’s delayed citizenship application, which had reportedly been stalled by Asio because of his links with China’s ruling party.

It was Dastyari’s involvement with Chinese donors that prompted the government to launch its anti-foreign interference crackdown, sparking a fight which spilled into the Bennelong byelection and beyond, leaving relations between the two countries tense.

Australia’s position on the militarisation of the South China sea further inflamed the situation. In May 2018 China’s foreign minister, Wang Yi, warned Australia to remove its “coloured glasses” in its dealings with China.

But the decision to cancel Huang’s passport is believed to be one of the first major pushbacks Australia has made against China since passing the anti-interference legislation last year.

Both major parties have been facing pressure to return the $2.7m Huang has given them in the past five years. His donation of $1.8m was also instrumental in establishing the Australia-China Relations Institute, run by a former foreign minister, Bob Carr, out of the University of Technology, Sydney.

Huang had also donated $3.5m to establish the Australia-China Institute of Arts and Culture at the University of Western Sydney.

The Liberal MP Andrew Hastie, who chairs the joint parliamentary intelligence and security committee, returned a $10,000 donation Huang had made to his campaign last year. And the NSW Labor leader, Michael Daley, announced earlier this week the party would be “quarantining” $100,000 in donations at the centre of an Icac probe.