By Dipankar De Sarkar

London, July 20 (IANS): Steel tycoon Lord Swraj Paul and Curry King Sir Ghulam Noon, two high-profile Indian-born supporters of Labour, say they will stop bankrolling Britain's ruling party if a proposed draft legislation goes through parliament.

The British ruling party has signalled its support to a bill to be introduced in parliament Monday that seeks to ban Britons who have non-domicile (non-dom) tax status from funding political parties.

Paul and Noon have said clearly they will rather stop funding Labour than give up the tax status, which allows Britons to save taxes on some of their incomes earned abroad.

"This is a strange bill before parliament, but I will follow the law. If the law comes in, I won't give money," Paul, who has funded Labour for 20 years, said in comments published in The Observer Sunday.

Noon, known as the Curry King of Britain for his vast frozen food and catering empire, said, "It is very surprising the government is introducing a law like this at a time when they are in dire need of money to win an election," adding he too would stop giving money to Labour if the Bill goes through parliament.

The move could seriously affect jaded Labour's bid for re-election after more than 12 years in power, and was described by the Labour-supporting Observer newspaper as a "crushing blow."

Billionaire Paul, founder and chairman of the Caparo Group of industries, who has backed Labour for over 20 year, had promised to bankroll the reportedly cash-starved party at the next general elections, due by June 3, 2010.

The 78-year-old Punjabi, who was made Deputy Speaker of the House of Lords by Prime Minister Gordon Brown last year, said the role of 'non-doms' is misunderstood.

"It should be remembered that I still pay a lot more tax than a lot of other people in the country. The problem is that every case is different. There are non-doms who pay full tax in this country. I fit in that category. So to make a general statement on non-doms is a futile exercise," he said.

The Bill to be presented Monday has been promised government support by Justice Secretary Jack Straw.

The opposition Conservative Party, which leads Labour in a string of opinion polls and is a strong bidder in the runup to the 2010 elections, targeted the issue of 'non-dom' donations within months of Brown becoming prime minister in June 2007.

Political analysts say raising the issue suits the Conservative party for two reasons: first, Labour is thought to be more dependent on non-dom funding than the Conservatives.

Second, it gives the party in opposition the public support generally associated with raising an 'ethical issue.'

However, in a strange twist, it is actually a Labour member of the House of Lords who has proposed the Bill that will be debated Monday.

The Bill by Lord Dale Campbell-Savours, a campaigning Labour politicians, was originally designed to seek clarifications on the tax status of Conservative party Deputy Chairman, Lord Michael Ashcroft.

Ashcroft holds British and Belizean nationality and is accused by Labour of bankrolling Conservative candidates in marginal constituencies of his choosing - a charge he denies.

The Labour government had opposed the Bill but withdrew plans to issue a three-line whip, apparently because of backbench pressure from its MPs, according to the Labour-supporting newspaper The Guardian.

A third important Indian-origin 'non-dom' donor to the Labour party is Lakshmi Mittal, the world's eighth richest man who has reportedly donated a million pounds to Labour over the years.