What is really going on in politics? Get our daily email briefing straight to your inbox Sign up Thank you for subscribing We have more newsletters Show me See our privacy notice Invalid Email

Labour faces “armageddon” if the party splits following the divisive leadership race, a top party donor warned today.

Businessman John Mills believes it faces an “existential crisis” as it battles to come to terms with Brexit and the battle between Jeremy Corbyn and Owen Smith for the party crown.

Shopping channel tycoon Mr Mills , who previously pumped £1.65million into Labour, feared the party could lose 50 seats if there was a snap general election.

And moderate MPs face “a substantial threat” to be reselected as candidates when constituency boundaries are redrawn, he said.

(Image: Ben Pruchnie/Getty)

Warning of the dangers of new Prime Minister Theresa May calling a snap poll, Mr Mills said Labour “would do extremely badly” while UKIP “would probably do a lot better”.

He urged Labour to hear the “cry of pain” of the referendum Out vote – and begin rebuilding heartlands support.

Fearing for its traditional strongholds, he said: “If the Labour Party lost 50 seats or something as a result of the swing away from Labour in the north of England and the Midlands, that would be disastrous.”

While he is undecided who to back in the leadership battle, Mr Mills believes Welshman Mr Smith could revive the party's backing in places like the South Wales Valleys , the Midlands and northern industrial cities.

(Image: James Maloney)

“I suspect he understands them in himself much more, whereas Jeremy Corbyn comes from a much more metropolitan background, more internationalist,” said the entrepreneur.

“We may be in a situation where Jeremy Corbyn appeals more to the large body of people who have joined the Labour Party recently, but Owen Smith would appeal more to the country at large.”

He cautioned against splitting the party if, as expected, Mr Corbyn triumphs when the result is announced on September 24.

“You're then going to split the left of centre vote - this really would be armageddon for MPs,” he said.

Mr Smith triggered the leadership race after Mr Corbyn refused to quit despite losing a no-confidence vote of MPs by 172 to 40 .

(Image: Getty)

Declaring it was “pretty likely” the current leader would survive the summer bid to topple him, Mr Mills doubted there “would be much of an appetite” for a second coup before the 2020 election.

Boundary changes offer Mr Corbyn the chance to shore up support across the country, he said.

“There are going to be reselections all over the place and, with all these new people coming into the Labour Party , this means that incumbent Labour MPs - particularly the ones that have taken a more moderate stance - are all going to be under substantial threat, or certainly perceived to be under substantial threat,” said the former party moneyman.

He was speaking at the launch of his pamphlet Healing the Wounds, which outlines the economic direction he thinks the UK should take post- Brexit .

Mr Mills, who chaired the Labour Leave campaign, feared UKIP would would exploit Labour woes as the party grapples with the referendum aftermath.

(Image: Getty)

Highlighting the “huge divide” between Labour’s official Remain policy and “what a large number of supporters thought”, he rubbished leadership hopeful Mr Smith's “dismally bad idea” for a second EU poll .

Mr Mills said: “It really does seem to me that this is a most impractical policy.

“Leaving aside the fact the decision was taken, it really does seem to be the worst way of dealing with it.”