A green energy tycoon and top Labour donor has claimed the donations controversy that has engulfed Sir Keir Starmer makes it impossible for him to award honours to the party’s financial backers.

Dale Vince faced allegations from his estranged wife in divorce court that he was likely to get a knighthood or peerage after donating £5million to Labour.

His wife, Kate, has alleged that he is rushing through a divorce in an attempt to deny her the right to use any title he receives.

However Dale, a former financial backer of Just Stop Oil, insisted he had not discussed a potential peerage with anyone in the Labour Party.

Dale Vince and Sir Keir Starmer

PA

It follows weeks of controversy over donations to the Prime Minister and other Cabinet members by Lord Alli, a longstanding Labour supporter.

In an interview with The Telegraph he said: “Anyone who thinks that’s remotely possible isn’t reading the room right now, isn’t reading the news right now.

“Have you seen where Labour and Keir are in terms of scandals around things for – or just gifts from donors, let alone giving things back from donors? I mean come on, read the room.

When asked if he would take a peerage, he said: “Honestly, I don’t know.I think it’s presumptuous to… you know, kind of have those considerations and to say those things. I haven’t thought about it and I don’t know.”

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Dale Vince, pictured at an environmental rally with former Green Party MP Caroline Lucas and actress Emma Thompson

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Vince said he thought it was “wrong” for Sir Keir to have initially declared some clothes as a financial contribution towards his private office, a move that was within the rules but has been criticised for lacking transparency.

He said: “I understand why there’s something here to talk about. I think it’s being overdone, but to a degree, I think maybe the way it’s been responded to has fed that. But I think right now, Labour are in a position where they can’t do right. Keir Starmer did declare the clothes, I think, as office expenses. That was wrong. Then he declared them as clothes.

“He did that himself, voluntarily – that caused the story. And now he’s said that he’ll pay the money back, and that’s caused another scandal.”

“I just think it’s an awful lot of fuss about nothing, it’s a big distraction, it’s really unfortunate and at some point we’ll be past it and talking about what’s happening in the country.”

Dale Vince used to fund Just Stop OilPA

It comes after Sue Gray has quit as Downing Street Chief of Staff because of fears she was “becoming a distraction” to Sir Keir Starmer’s Government. There have been reports of tensions in Number 10 involving Ms Gray, including between her and Sir Keir’s chief adviser, Morgan McSweeney, who will succeed her in the role.

In a statement on Sunday, Gray said she was “pleased to have accepted a new role as the Prime Minister’s envoy for the regions and nations.”

Sir Keir thanked Ms Gray for “all the support she has given me, both in Opposition and Government, and her work to prepare us for government and get us started on our programme of change.

“Sue has played a vital role in strengthening our relations with the regions and nations. I am delighted that she will continue to support that work.”

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