Labour have demanded that the Conservatives return millions of pounds in donations from one of the party's most high profile supporters after his company was fined £54 million amid allegations of rate-rigging.

Three former employees -Colin Goodman, Darrell Read and Daniel Wilkinson - of city broker ICAP have been charged in the United States over allegations of manipulating the interbank lending rate Libor.

The firm is owned by former Tory Party treasurer Michael Spencer, who has given the party more than £4m in recent years.

The allegations come as the spotlight turns on the Conservatives as they prepare for their annual party conference this weekend in Manchester.

Michael Dugher, Labour's Vice-Chair, accused Conservative leader David Cameron of foot dragging when allegations of Libor rate rigging first emerged last year.