The Conservative Party was forced to give up a claim on a £10 million bequest from a businessman yesterday when the High Court ruled that the donor was mentally unfit when he signed the will.

Branislav Kostic, a pharmaceutical tycoon from Ealing, West London, left his entire fortune to the Tories after claiming that Margaret Thatcher could save the world from a satanic plot.

He cut his relatives out of his fortune after telling them that they were part of an international conspiracy of dark forces out to kill him.

The judgment could be expensive and embarrassing for the Tories, who contested the claim from Mr Kostic’s only son, Zoran. The party will now face demands for hundreds of thousands of pounds in legal costs as well as repayments of some of Mr Kostic’s donations.

Mr Justice Henderson told Court 60 that Mr Kostic lacked “testamentary capacity” when he cut his son from the will.

“His natural affection for Zoran had been poisoned or distorted by his delusions . . . He was wholly unable to dispose of his property in the way which he would have done if of sound mind,” he said.

Mr Kostic died aged 80 in 2005, leaving £8.3 million, which is now understood to have grown to nearer £10 million.

The Belgrade-born tycoon was a loving family man until he became gripped by delusions around 1984. He read and spoke five different languages and had a wide appreciation of history, mathematics, science, philosophy, literature and the arts.

His beliefs in plots to kill him soured his relationships with his wife, sister, mother, friends, advisers, bankers and colleagues. He accused his wife of stealing his passport and being a nymphomaniac with numerous male and female lovers. He believed that his mother and sister conspired to kill his father and brother-in-law.

In an earlier hearing the family said that their attempts to retain contact with him were rebuffed and that he even refused to eat the chocolates they sent him at Christmas, because he thought they were poisoned.

In a note to Scotland Yard, he reported that a 100-strong international vice ring was attempting to poison him.

In the midst of his delusions, however, he saw Mrs Thatcher’s Tories as a bulwark against the “satans”.

Mr Kostic wrote to the Prime Minister in 1985, imploring her to save the world from “bestial monsters”.

“It seems to me that someone (not Gaddafi, IRA, Palestinians or Mafia, they are only the marionettes) organised many years ago a type of international university to study human weakness . . . I am sending a cheque for £5,000 to fight the evil wicked demons and SATANS and I am fully at your disposal,” he wrote.

Although Tory policy was to refuse donations if there were any doubts about a benefactor’s capacity to donate, Mr Kostic’s offerings were accepted with few questions asked. Letters submitted to court show that he once gave £13,000 “in the name of the magic number 13”.

Mr Kostic had made a will in 1974 leaving his riches to Zoran, who was 17 at the time. But in 1987 he wrote to David Mellor, his Tory MP: “I have to make my will . . . It is important to me that this wealth doesn’t finish up in the hands of destructive people — satanic monsters.”

Mr Mellor declined to assist. Nevertheless, Mr Kostic was introduced to the Tory-connected legal firm of Trowers & Hamlins through party channels. There, he worked closely with Anthony Trower, an executive committee member of the association.

In one letter in May 1989 to Mr Trower, Mr Kostic sent a “semi-intelligible, anti-Semitic rant”, according to the judgment.

He enclosed an article from The Times by the late Bernard Levin with a donation of £3,000 to mark the tenth anniversary of Mrs Thatcher’s premiership. In it, he referred to Levin as one of “the Chosen Creatures”. Two days later, Mr Trower replied: “I shall re-read with interest the two articles by Bernard Levin.”

After a long lunch with Mr Trower at Simpson’s-in-the-Strand, Mr Kostic signed a fresh will leaving his entire estate to the Conservatives.

Yesterday, Zoran Kostic, 50, speaking through his solicitor Robert Hunter, of Allen & Overy, criticised the Tories for contesting the case.

“The Conservative Party Association made it necessary for my family to come to court and to give evidence on matters that we found deeply distressing,” he said.

The Tories can expect a bill of several hundreds of thousands of pounds in legal costs. They could also be asked to repay tens of thousands of pounds donated while Mr Kostic was unwell.

Lawyers for the Conservative Party Association had argued that Mr Kostic’s paranoid delusions had not poisoned his affection for his son.

A Conservative spokesman declined to comment but noted that the money had not been been transferred into party coffers, pending the case. The Conservative Party had accepted that Mr Kostic was eccentric, but said that his letters demonstrated a love of language and an “appreciation of metaphor and hyperbole”.

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