TWO Labour donors who have given the party nearly £1.7m have withdrawn their support amid growing concerns about Gordon Brown’s handling of the economy.

Sir Christopher Ondaatje, a Canadian publisher, and David Potter, chairman of Psion computers, are understood to be worried by the high levels of consumer debt and the recent “run on the bank” by customers of Northern Rock.

Their decision comes as a further blow to Brown, who is struggling to regain credibility after his decision not to call a snap election. Labour is also significantly in the red, with net debts of £20m, including £14m of outstanding loans.

Ondaatje, 74, donated £1.6m to Labour since 2001. It is understood, however, that he has since become disillusioned by politics and now fears that Britain is on the verge of financial crisis.

A source close to Ondaatje said: “Quite frankly, this is a messy time in British politics. Both leaders seem to be heading for the line knowing full well that there is an imminent financial crisis round the corner.

“It will be a pack of cards that will start with the housing market and then spread to other institutions. He doesn’t think either party knows how to deal with it. He is very disillusioned with being involved in politics. He is unlikely to do that [donate] again.”

Potter, who has donated nearly £100,000 to Labour, has similar concerns. He also objected strongly to Blair’s decision to invade Iraq.

A source close to Potter said: “He does not think the economy is quite as strong as people might assume. He thinks there are considerable dangers and that after a period of good demand the next five years are not going to be quite as good. He is also concerned about the centralised, nanny state, authori-tarian Britain.”

Other donors, however, remain committed Labour supporters. Lord Paul, the industrialist, gave £25,000 to Brown’s leadership campaign. Paul, a long-term admirer of Brown, recently bought 6,000 copies of Brown’s book, Courage, to give to secondary schools. “Whatever I can afford at the time I will give,” Paul said.

Sir Gulam Noon, the food tycoon whose nomination for a peerage was blocked after he was advised by Labour not to declare a £250,000 loan, also remains supportive. He is now considering converting his loan into a donation.

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