SOME of Labour's biggest donors have stopped funding the party because they believe the wrong Miliband brother is in charge, it was reported last night.

Around six of the party’s most lucrative funders, including Lord Sainsbury, who has bankrolled £13m for Labour in the past decade, are said to have stopped bankrolling the party because they are worried about its direction under Ed Miliband. Lord Sainsbury vowed to support North East MP David Miliband if he won the leadership contest last September, but he narrowly lost out to his younger brother.

Senior Labour figures are said to believe that the group of donors will provide funds again, if the South Shields MP becomes leader of the party in the future.

David Miliband, 45, had millions of pounds pledged if he won the leadership election, whereas Ed is said to have had only £500,000 pledged.

The failure of the party’s biggest funders to renew their pledges would be a blow to the elected leader. It would also be expected to make Labour more reliant on trade unions and taxpayer’s money.

Other funders said to be turning their back on the Labour leader include financier Sir Ronald Cohen, who has handed over £2.8m previously, and businessmen Chai Patel, who lent £1.5m to the party.

Barry Townsley, Sir David Garrard and Andrew Rosenfeld, who each lent around £1m, are also reported to have shut their wallets. A source said to be close to one of the donors told a Sunday newspaper that donors were walking away because Ed Miliband had departed from the New Labour project.

The source also claimed the appointment of Ed Balls to replace Alan Johnson as Shadow Chancellor has upset some funders.

He said: “It’s about Ed, his economic strategy and where he’s taking Labour.”