London has become a cash cow for US presidential candidates seeking to fund their 2008 White House bids, with almost half of all overseas donations coming from the capital.

Research by The Times reveals that presidential hopefuls have already raised more than $1 million (£485,000) abroad in 2007 - more than a year before the election - of which 40 per cent came from London. The figures are ten times the aggregate reportedly raised abroad in the first three quarters of 2003, the year before the last presidential election.

In a sign of Britain’s importance to the campaigns, Michelle Obama, wife of the Democratic presidential candidate, Barack Obama, headlined a fundraiser for her husband’s bid in a Central London hotel last week. Last month Rudy Giuliani, the Republican candidate and former New York City Mayor, hosted a similar event in Knightsbridge.

According to The Times’s analysis of US government records, more than 40 per cent of all money donated this year by US citizens living outside America comes from Britain – and almost all of that from within London.

The donations made so far are expected to rise dramatically after US primary elections determine the Democrat and Republican nominees next spring. Afterwards, fundraising rules allow campaigns to solicit further donations toward the general election next November.

US fundraising laws also dictate that only American citizens may contribute to candidates’ war chests, but this includes a very large number of business people, diplomats, students, and military personnel and other expatriates dispersed around the world.

Current estimates of Americans living abroad range from four to seven million people – a population greater than the totals in 24 US states. So when they see that a speech in West London can raise as much money as an event in West Los Angeles, candidates take notice.

Mr Obama and Mr Giuliani have led their party rivals in British fundraising in the third quarter of this year, according to US Federal Election Commission records. The amounts are small compared with the amount raised domestically, but every little helps in the competitive primary round.

Mr Obama has raised £36,000 in the past three months in Britain, while Hillary Clinton, the Democratic front-runner, has collected £18,000. Mr Giuliani leads Republican contenders with £18,000 from Britain, while his rivals, Senator John McCain and the former Massachusetts Governor Mitt Romney, raised £2,200 and £1,600 respectively.

“There are 250,000 Americans in the UK,” said Iwan Morgan, a professor of American studies at the University of London. “A lot of them are university-educated, middle-income or better, and they probably have strong political interests. So they are a natural constituency to tap into.”

Tickets to Mrs Obama’s speech last week ranged from £25 for students to £2,200 - the legal maximum - for VIPs, paying for some early “face time” with the candidate’s wife.

“If someone had told me ten months ago that I would be standing in London in support of my husband’s bid for the presidency, I would have said, ‘You’re crazy’,” Mrs Obama said, opening her address last Monday in front of a giant American flag.

Although she spoke about her husband’s leadership credentials and their life stories as on any other campaign stop, Mrs Obama did include several comments tailored for expatriates’ ears.

She said that in electing Mr Obama, who would be the nation’s first black president, voters had “an opportunity to fundamentally change the way the world views us”.

Touting her husband’s multilateral approach to diplomacy and security policy, she said that Americans were currently “afraid of everything and everyone. That fear closes us off to the rest of the world.”

Most interestingly, given her husband’s childhood in Indonesia, Mrs Obama light-heartedly argued that “you should have to live abroad to be the president of the United States”. US laws require presidential candidates to have spent at least 14 years as a resident on American soil.

For those not running for president, an increasingly greater number are living abroad, many holding dual citizenships, affording them an unusual opportunity to affect both US and local politics.

“For the privileges [of dual citizenship], I feel I have some kind of responsibility to pay attention in both places,” said Candace Allen, a British-American dual citizen at the Obama event, who helps to organise international outreach for the campaign.

Professor Morgan said: “You’re electing the leader of the free world. It is the foreign election in which foreigners have the most interest. Anyone with an American connection would certainly have greater interest in being involved.

“With the opportunity to have some influence on such a big player, it’s hardly surprising that people do it.”

Cashing in

Sums raised by US presidential candidates in Britain since June. The parties choose their candidates next summer £36,000

£36,000

Barack Obama Democrat

£18,000

Hillary Clinton Democrat

£18,000

Rudolph Giuliani Republican

£4,500

Joseph Biden Democrat

£2,200

John McCain Republican

£1,700

Christopher Dodd Democrat

£1,600

Mitt Romney Republican

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