A controversial Iraqi-British billionaire who funds one of the UK's most strongly anti-Zionist websites organised a banquet in honour of Lib Dem leader Nick Clegg, and a fundraiser for Susan Kramer, the party's candidate in the high-profile seat of Richmond Park.

Nadhmi Auchi, 73, was convicted of fraud in the giant French Elf-Aquitaine oil company trial in 2003 and given a suspended sentence, although he is seeking to appeal the verdict.

The Lib Dems told the JC that the connection between the party and the billionaire was limited to the two events and that Mr Auchi was not a donor to the party.

Mr Clegg spoke at a dinner hosted by Mr Auchi's Anglo-Arab Organisation, set up to promote understanding between Britain and the Arab world last November. The Lib Dems confirmed that the AAO also organised a £60-a-head dinner for Ms Kramer, which raised around £5,000.

Mr Auchi's Middle East Online site promotes material by well-known anti-Zionists such as musician-activist Gilad Atzmon and Jeff Gates, who runs the anti-Israel "Criminal State" blog.

Mr Auchi also helped fund the first of George Galloway's "Viva Palestina" convoys taking aid to Gaza.

The former Lib Dem leader Lord Steel is a longstanding director of Mr Auchi's Luxembourg-registered company General Mediterranean Holdings. Other politicians who have worked with Mr Auchi include Lord Lamont and former minister Keith Vaz.

At the weekend, the Mail on Sunday revealed that Lord Steel approached Lib Dem health spokesman Norman Lamb to reassure him about Mr Auchi after Mr Lamb asked a series of questions about the billionaire in Parliament.

Mr Auchi is fiercely protective of his reputation and has used libel lawyers Carter-Ruck to force several newspapers and blogs to remove references to his activities. Despite Lord Steel's approaches, Mr Lamb raised this issue in a Commons debate on libel in December 2008: "It is alleged that Mr Auchi and his lawyers, Carter Ruck, have been making strenuous efforts to close down public debate."