NORTH-East millionaire Duncan Bannatyne last night insisted there was no connection between his £10,000 donation to the Labour Party and a planned shake-up of gambling laws.

The Darlington businessman, whose plans to move into the casino business would be impossible without the changes, said it was "pure coincidence".

Mr Bannatyne said he had never discussed the proposed gambling laws with anyone in the party and had switched allegiance from the Tories because of the cash-for-questions scandal.

But the tycoon, who has made his fortune from care homes and fitness businesses, admitted he would not go ahead with his new venture, Bannatyne's Casinos, unless the law was changed because it would not be financially viable.

His donation was revealed in the latest Labour Party figures yesterday, sparking a new cash-for-favours row.

Speaking to The Northern Echo, last night, Mr Bannatyne, said: "I have never discussed the White Paper on the casino industry with anyone in the Labour Party and that remains a fact."

He said that the Government paper had given him ideas for a new business venture which would have been impossible otherwise.

"I have started a nursing homes business and a fitness business and I am always on the look out for growing industries. Casinos are a growing industry,", said Mr Bannatyne

"When the Government reform came out, I discovered that it would be possible to open casinos in new areas. Until that goes through parliament, you cannot open a casino unless it is a designated gambling zone.

"So I saw an opportunity and I thought I would go into that. About the same time, I made donations to the Labour Party and that was pure coincidence."

Mr Bannatyne, who is believed to be worth £90m, revealed that he had given the Labour Party a £6,000 donation last year as well as a £10,000 donation recently.

He has also pledged £10,000 a year to the party until the next General Election.

His donation was included in quarterly figures which showed Labour's income plummeting as it faces its biggest cash crisis for years.

Membership is down and the party is understood to be £6m in the red.

Mr Bannatyne said he was a big Labour Party supporter and had voted for Alan Milburn in the past because of the good work the politician does in Darlington.

He has plans to open two casinos, one in the North-East and the other in Scotland, but he said they would not be huge Las Vegas-style venues as has been reported.

Mr Bannatyne said: "I have various options on the two sites. I cannot tell you where the North-East one might be."

He added: "If the law does not change, I can't open any casinos unless they are in a designated gambling area, and they have casinos in all these areas already.

"I am not going to set up a casino next to a casino."