The knighthood, in the Queen's birthday honours, was made on the recommendation of the government of Belize, where he has joint nationality.

Is it right that somebody who seeks such a central role in one of our political parties should be so closely involved with the government of a foreign country?

MP Peter Bradley

Labour MP Peter Bradley said the award, coming soon after millionaire Euro-sceptic businessman Paul Sykes agreed to back the Conservatives, said the party was now dependent on a few wealthy donors.

"Michael Ashcroft has now got the complete set - a knighthood courtesy of a left-wing party which he has funded in Belize and a peerage from an increasingly right-wing Tory Party in Britain," he said.

Mr Bradley, who has campaigned against Mr Ashcroft, went on: "Is it right that somebody who seeks such a central role in one of our political parties should be so closely involved with the government of a foreign country?"

Ambassador's pledge

Mr Ashcroft has made multi-million-pound contributions to the Tory Party since the 1997 election.

Baroness Jay, Leader of the House of Lords, branded the peerage "stinking".

Friends say Mr Ashcroft has helped the country of Belize

Earlier this year, the tycoon promised to give up his tax-exile status and come to live back in the UK as a condition of accepting the peerage.

And he said he would no longer act as Belizean ambassador to the United Nations, under an assurance given to the Political Honours Scrutiny Committee.

Now, he has been given a KCMG - Knight Commander of the Order of St Michael and St George.

As a member of the Commonwealth, Belize is entitled to bestow honours on its citizens. Although names are submitted to Buckingham Palace for clearance, it would be highly unusual for a nomination to be rejected.

In the official citation, the honour was said to have been made for "public service to the community and country".

'Touched'

Mr Ashcroft was not in Britain and was unavailable to comment.

But friends described Mr Bradley's comments as "distasteful".

Michael has ... given up time and energy to tackling the problems of this small, developing country

Friend of Mr Ashcroft

One said: "Although he is British to the core, Belize is where his heart is. I think he was genuinely touched that they did this. It came as a complete surprise.

"Michael has been the UN ambassador for 10 years and given up a huge amount of time and energy to tackling the problems of this small, developing country."

Conservative Party chairman Michael Ancram congratulated Mr Ashcroft on his knighthood in recognition of his "long record of public service" for a Commonwealth country.

He dubbed the attacks by Labour MPs "sad and pathetic".

"They are merely thrashing around in an effort to distract attention from their own failure to deliver on health, pensions and education, and from their deep splits on Europe," he said.