A leading donor behind the Brexit victory has pledged to fund a campaign to oust almost 140 pro-remain MPs in an attempt to ensure there is “no backsliding on Brexit” after the election.

Jeremy Hosking, the multimillionaire City asset manager, told the Observer he was prepared to spend hundreds of thousands of pounds targeting MPs who backed staying in the EU, despite representing areas that voted for Brexit.

The move is designed to exploit divisions in Jeremy Corbyn’s Labour party over Brexit and to seize seats that usually return a Labour MP.

Hosking, who gave more than £1.5m to Vote Leave during the referendum campaign, said he wanted to help give Theresa May “an army” of pro-Brexit MPs that was “fully equipped and as big as possible”.

Tory candidates in 138 constituencies where most voters backed Brexit but which are represented by an opposition remain MP will be eligible to apply for funding. Hosking is offering up to £5,000 per candidate, leaving him with a potential bill of about £700,000 for the project.

The bulk of the campaign will be aimed at helping the Tories secure seats in the Midlands and northern England that have regularly returned a Labour MP. Hosking said that “traditional Labour voters should on this occasion hold their nose and vote Tory” to help deliver Brexit.

The campaign has potential implications for the internal make-up of the parliamentary Conservative party after the election.

Some Brexiters believe that a new cohort of Conservative MPs who owe their victory to May’s determination to leave the EU, exit the single market and impose immigration controls will be crucial in stopping the government shift towards a “soft Brexit” after the election.

Hosking said that new Tory MPs from traditionally Labour-held seats would help safeguard a “full, national Brexit”, rather than a “City of London Brexit”.

“I think it is going to be a lot of hard work so we need the best team there, and we need all the Brexiteers there – particularly the Brexiteers in the Labour heartlands,” he said. “I think that will do a lot for Brexit.”

Tories in the influential European Research Group, the 70-strong network of MPs that backed Leave and want a hard Brexit, are already confident that its membership will swell after the election.

One Brexiter said: “There is no way to unpick Brexit that doesn’t involve civil war. What would be the upside for the government? It is not a difficult choice.”

Tory strategists hope that they can use Brexit as a way of finally convincing voters in Labour’s heartlands to end their instinctive hostility to the Conservatives and change their allegiance. One senior Tory Brexiter said: “If they don’t vote Tory now, they probably never will.”

Hosking, who funded the Tories with a £100,000 donation to the central party before the last election, ran the Brexit Express poster campaign before the EU referendum. He also gave about £1.7m to the official Vote Leave campaign.

His intervention illustrates the impact that the EU referendum is having on the election on 8 June. His funding campaign is not being run by Conservative HQ. Instead, candidates will be able to apply for funds through Hosking’s Brexit Express campaign.

While Hosking is hoping to replace pro-remain MPs with Tories prepared to back May’s Brexit strategy, campaigners concerned about the prime minister’s approach are backing their own slate of candidates.

Best for Britain, the group led by pro-EU campaigner Gina Miller, is throwing its support behind 16 candidates that have vowed to leave all options on the table should May negotiate a bad Brexit deal. They include Clive Lewis, the former shadow business secretary, and former Lib Dem leader Nick Clegg. Some candidates will receive direct financial help, while others will be aided by local ads and campaigning, asking people to vote tactically.

Hosking said he had opted to back exclusively Tory candidates because their support for Brexit would in effect create a “government of national unity” under May that could deliver on the referendum mandate to leave the EU.

He said that he was prepared to spend heavily in order to secure “the sovereign future of this independent-minded democracy”.

“The British voters, having delivered a clear answer to the question put to them on Europe, now deserve to see that decision delivered upon,” he writes on his Brexit Express website. “That’s the essence of direct democracy. We have seen that the institutions of the EU are determined to make life as difficult as possible for the UK and, indeed, have told us that ‘Brexit cannot be a success’.

“I believe it can be and, realistically, the only way to ensure ‘No Backsliding on Brexit’ is to back the prime minister to the fullest extent. I’m asking Brexit voters to put aside their party allegiances temporarily and climb aboard the Brexit Express.”