A former Conservative Party treasurer has called for donations from Asil Nadir's Polly Peck firm to be returned.
Lord McAlpine said it would be morally wrong for the party to keep the money - donated between 1985 and 1990 - in the wake of Nadir's theft convictions.
The Conservatives have previously insisted the money was received in good faith from a legitimate business.
Nadir , 71, was jailed for 10 years on Thursday for stealing nearly £29m from his Polly Peck empire.
'Tainted money'Lord McAlpine was party treasurer at the time the donations were made.
He now believes the party should have handed the cash back to Polly Peck's creditors when Nadir fled Britain in 1993 following the collapse of his empire.
Labour have also called for the return of the money.
Lord McAlpine told the Daily Mail: "It is tainted money and it shames the Conservatives if they hang on to it. They have a moral duty to give it back.
"The moment he fled the country in 1993, to avoid criminal charges, it was obvious to me he was a complete conman. Frankly, the Tories should have given the money back in 1993.
"But today the case is even clearer. There is a moral imperative for the money to be returned. The money was not Asil Nadir's to give although we thought it was at the time.
"Therefore the Tory party has a duty to return it. It will speak volumes about the character of the modern Tory party if they don't do the right thing. I trust that David Cameron is an honourable man."
Prison sentenceIt has been reported that Polly Peck's administrators have called for the return of £365,000 which they believe Nadir stole from his company.
The Conservatives argue that they have never received any personal donations from Nadir, and they have no evidence that the money they did receive via his business interests was stolen.
Nadir stole from Polly Peck International, which was a major UK conglomerate until 1990 when it collapsed after a Serious Fraud Office investigation.
He fled the UK in 1993 while awaiting trial and went to northern Cyprus but returned in 2010.
His solicitors said he maintained his innocence and would be lodging an appeal.
