One of the most generous donors to the Conservatives, Lord Ashcroft, has been told by David Cameron that he will have to pay his full share of UK tax or lose his seat in the Lords.

Until now Cameron has refused to clarify Lord Ashcroft's tax status. The Tory donor, who has made donations of more than £2.5m to the party since 2003, has a business empire based in Belize and his tax status has never been fully clarified.

The FT reports that the Tories are now taking a tougher line on the issue, saying that they will back laws that ensure lawmakers are UK taxpayers and that these rules will apply to Lord Ashcroft and any other peer.

A spokesman for Lord Ashcroft said a change in the law would not affect the peer, but refused to confirm that this meant Lord Ashcroft was paying full UK tax on his earnings.

Further reading:

Digby Jones breaks ranks over non-dom tax

Lord Mayor of London attacks non-dom policy