Hillary Clinton has been forced cut all ties to the fugitive fundraiser Norman Hsu, announcing that she will return more than $850,000 he secured for her campaign from more than 250 donors.

Aides have also promised that from now on they will require major fundraisers to submit to additional vetting procedures, including criminal background checks.

The extraordinary measures are designed to limit the damage inflicted to her campaign after a series of embarrassing disclosures about Mr Hsu which have rekindled memories of the funding scandals surrounding Bill Clinton's presidency in the 1990s.

Previously, Mrs Clinton had planned only to give to charity the $23,000 she received from Mr Hsu directly for her presidential and senatorial campaigns. That decision followed his fall from grace this month when it was revealed that he was a fugitive from justice in a 15-year-old criminal case in California.

But this week it was reported that the FBI was investigating whether Mr Hsu paid "straw donors" to send campaign contributions to Mrs Clinton and other candidates. Under US campaign finance laws, the maximum donation to a candidate is limited to $2,300.

There is increasing concern about the activities of fundraising "bundlers" such as Mr Hsu, who ask friends and acquaintances to donate to campaigns. In his case, they included the Paw family in Daly City, California, who despite living in low-income housing are shown to have given more than $200,000 to Democratic candidates since 2005.

Last month a lawyer from Detroit was indicted for making $125,000 in illegally bundled contributions to John Edwards's 2004 presidential campaign.

Another indication of the pressure they may be exerting is the rising number of contributions from secretaries, administrative assistants and executive assistants for whom a $1,000 political contribution may be a big expense. The Washington Post has reported how at this point in the campaign four years ago, 127 donors making contributions listed one of those three occupations. In the first six months of this year the number was 526 and the average payment was for nearly $800.

Mr Hsu, who has also made contributions to other political campaigns including that of Barack Obama, has described the outstanding fraud charges as a misunderstanding. But last week he failed to show up at a court hearing in Redwood City, California. Instead, he booked passage on an Amtrak train headed to Chicago.

It was reported that passengers in the sleeper compartment across the aisle noticed a hat, a book and other items spilling into the hallway from under the door. The next morning, the curtains were still drawn. Returning from breakfast, one passenger peeked in and saw a person wedged against the door in the foetal position, bare-chested.

After conductors used a crowbar to pry the door open, it was said that Mr Hsu “could not stand", pills were rolling around on the floor of the compartment and he asked Amtrak attendants if he was in jail. He is now being treated in hospital.

Mrs Clinton's spokesman Howard Wolfson said: "In light of recent events and allegations that Mr Norman Hsu engaged in an illegal investment scheme, we have decided out of an abundance of caution to return the money he raised for our campaign."

Times Recommends

• Please help: maimed children of war want their lives back
• Cabal seizes diamond riches to buy power
• White House gatecrashers got to the president