Labour peer Lord Haskins has been expelled from the party for giving money to a Liberal Democrat candidate during the last election.
Lord Haskins said the Lib Dem candidate was a friend
The wealthy businessman gave £2,500 to Lib Dem Danny Alexander, who beat Labour's Dave Stewart in Inverness, Nairn, Badenoch & Strathspey.
Labour said the donation to the Lib Dems broke party rules.
Lord Haskins said Mr Alexander was a friend. The peer said he also donated cash to Labour on the same day.
Labour's National Executive Committee has now expelled him.
Lord Chris Haskins, former chairman of Northern Foods and Express Dairies, was ennobled by Tony Blair and was one of Labour's leading donors.
He said he would not be seeking a return to Labour nor would he be joining the Liberal Democrats.