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Around 60 Labour MPs have rallied behind an amendment that would restrict donations from individuals and companies to £500,000 in the first year

Labour has threatened a cap on party donations after Nigel Farage's Reform UK received a record £72million gift.

Angela Rayner confirmed that a "task and finish" group had been established to assess whether additional legislation was required.

Cryptocurrency billionaires Ben Delo and Christopher Harborne each gave £36m to Nigel Farage's party.

Ms Rayner made clear that a cap remained on the table, telling the BBC: "So it's not as simple as we're saying we won't put a cap [on donations]."

She added that the taskforce would examine how to prevent individuals from being able to "overpower and buy their way into democracy".

Around 60 Labour MPs have rallied behind an amendment tabled by Stella Creasy that would restrict donations from individuals and companies to £500,000 in the first year, dropping to £100,000 annually thereafter.

Andy Burnham faces mounting pressure from backbenchers to honour a proposal he floated during his Makerfield by-election campaign for a £500,000 yearly limit.

However, he has reportedly retreated from that position after facing resistance from trade unions, Labour's most significant financial supporters.

A bill already progressing through Parliament would prevent British donors living abroad from contributing more than £100,000 per year, with the restriction applied retrospectively to March 25.

Currently, no limits apply to donations from UK-based individuals to political parties.

Hitting back on the threat of capping party donations, Zia Yusuf wrote on social media: "Make no mistake. There is no precedent in modern British political history for a government to pass legislation that retroactively confiscates donations from political rivals that were lawful at the time they were received.

"The fact the media are trying to normalise this only shows they share the government's goal of damaging Reform. Burnham and his far left MPs are a threat to Britain as we know it."

Reform UK sources have said they are "100 per cent confident" that both donations comply with existing rules and the retrospective provisions on overseas funding.

Speaking to GB News, Reform UK's Treasury spokesman said the donations were a "breakthrough moment" which would allow the party to “level the playing field" with Labour and the Conservatives.

He said: "Our 270,000 members have got us to this point, but we did need this now so that we actually have the bandwidth to build the team in the country. It means that we can level the playing field with the two old parties who have raised far more than Reform has over the last five years."

He added the party was now "battle ready" for an election, whether it comes "in a couple of months or indeed in two years".

“They are not buying something here. What they want is a government to come in and fix this country.”

Mr Jenrick added the pair were "so disillusioned with the state of the country" they believed Reform UK was the only option capable of changing it.

He also defended the donations by pointing to the scale of funding received by Labour from trade unions, saying: “In the last comparable five-year parliament, the trade unions gave £68million to the Labour Party."

Farage's party has amassed over £86million in donations this year alone, vastly outstripping the Conservatives' £10.2million and Labour's £7.7million.

Both Mr Harborne and Mr Delo have maintained they seek nothing in return.

Mr Harborne characterised his contribution as a "philanthropic gift to our country" driven by concerns over AI, climate change and nuclear conflict, while Mr Delo said he wanted to ensure a "fair fight and a level playing field" for Reform UK.