Humza Yousaf has urged the Tories to return £10million to a donor who said the black MP Diane Abbott should be “shot”, saying the comment was racist, sexist and incited “hatred”.

The First Minister also said the Conservative party was not merely “riddled” with Islamophobia but was “institutionally Islamophobic”.

It followed a growing row over Frank Hester, a businessman who gave the Tories two donations of £5m last year, and remarks he reportedly made in a 2019 work meeting. 

The Guardian reported last night that Mr Hester told colleagues that looking at Ms Abbott, who was then Labour’s shadow home secretary but is currently suspended from the party, made you “want to hate all black women” and said she “should be shot”.

Mr Hester said in the meeting that he did not hate all black women, but seeing Ms Abbott on TV meant “you just want to hate all black women because she’s there”.

Mr Hester has since apologised for making “rude” comments while insisting his remarks “had nothing to do with her gender nor colour of skin”.

He also said he abhorred racism, calling it “a poison that has no place in public life”. 

Ms Abbott, the MP for Hackney, said Mr Hester’s comments were “frightening”, adding: “The fact that two MPs have been murdered in recent years makes talk like this all the more alarming."

Labour leader Sir Keir Starmer called the comments “abhorrent”.

After giving a speech on economics and independence at the London School of Economics, Mr Yousaf was asked in a Q&A about Mr Hester’s remarks.

The First Minister, who was recently criticised by Tory MSP Stephen Kerr for authorising public funding for a UN agency in Gaza while his parents-in-law were trapped there last year, said: “I stand in full solidarity with Diana. She has been a trailblazer for many years. 

“We may have our differences on particular issues, but I stand foursquare alongside Diane Abbott. 

“Those comments from Hester are not just racist, they're not just sexist, they are inciting hatred, which is completely and utterly unacceptable. 

“And if the Conservative Party had any moral principle, then they will return every single penny and tell him where his money should go. That is my honest view.”

He went on: “And my honest view on the question of the Conservative Party more generally, is that there is simply no doubt in my mind, that the Conservative Party is not just riddled with Islamophobia but is institutionally Islamophobic 

“How could it not be when you hear the comments from [former Home Secretary] Suella Braverman and [Reform defector] Lee Anderson, who was a senior member of the Conservative Party up to a few days ago, was able to make the comments that he made about [London Mayor] Sadiq Khan [being controlled by ‘Islamists’], and on a single senior Conservative including the Prime Minister was able to call it Islamophobic.

“And that is of course the party who also elected a leader [Boris Johnson] that described Muslim women as bank robbers because of the way that they look.

“So the Conservative party in my mind is undoubtedly and institutionally Islamophobic.” 

Earlier, Mr Yousaf used his speech to attack the “cosy no-change consensus” at Westminster between Labour and the Tories over Brexit and the UK economic model, contrasting it with the opportunities, and he admitted, the challenges, of independence. 

Pamela Nash, chief executive of Scotland in Union, said: “There are devastating problems at home, yet Humza Yousaf wants to instead bang the drum for the break-up of Britain.

“The SNP’s constitutional obsession has come at the price of every devolved responsibility.

“The NHS is in crisis, education is struggling badly and the cost-of-living crisis shows no sign of abating.

“A responsible First Minister would put addressing these at the top of their priority list.

“Instead, he’s fled the scene to talk about the only thing the SNP really cares about.”