Lord Michael Ashcroft, who is estimated to be worth some one billion pounds and is vice chairman of the opposition Conservative Party, declared on his website: "My precise tax status is that of a 'non-dom' - a status that allows the taxpayer to avoid paying taxes in Britain.

"Two of Labour's biggest donors Lord Paul (recently made a privy councillor by the prime minister) and Sir Ronald Cohen - both long-term residents of the UK - are also 'non-doms'," added Ashcroft, who used to live in Belize.

Alongside, Conservative leader David Cameron claimed Ashcroft's status "happens to be the same as Lord Paul, one of Labour's biggest donors, someone whom the prime minister made a privy councillor."

But the Caparo Group chairman dismissed the comparison, saying: "It is really ridiculous for anybody to start comparing me to anybody. My view has been simple... I am one of the most open people (about the fact) that I am non-dom. That's what the law allows me and that's what I am.

"I have never hidden the fact or said it was my own private affair. I don't know why they are using my name, except to cover themselves up."

While Paul, a close friend of British Prime Minister Gordon Brown, has given £69,000 to Labour, including £45,000 to Brown's 2007 party leadership campaign, Ashcroft has given the Conservatives £4.5 million.

Former Labour minister Denis McShane said: "The Tory propagandist Iain Dale is tweeting frantically about Swraj Paul, a Labour donor and Indian steel magnate with business operations across the globe.

"Unlike Lord Ashcroft has an office and staff at the Tory HQ, and masterminds the Tory strategy to win key marginals with a massive targeted spend. Lord Paul has no party or policy role."

However, the Conservatives, bidding to topple Labour in general elections due by June 3, are asking questions about Brown's 2009 appointment of Paul to the privy council - a position they say is meant for people who are involved in affairs of State.