Keir Starmer has announced that ministers will bring in a temporary ban on crypto donations to politcal parties in a blow to Nigel Farage’s Reform UK.

The move came as MPs were warned there should be a moratorium on donations in cryptocurrency while cash from ex-pats should be capped to stop foreign interference in British politics,

That would also outlaw Reform UK’s record-breaking £9m donation from a British businessman based in Thailand.

An independent review into foreign financial influence also found that Iran, Russia and China are trying to “cause harm” to the UK’s democracy.

It said that foreign interference in the UK is “real and persistent” while the government needed to make it a “far higher” priority.

Sir Keir told MPs at PMQs that the report “sets out the stark threat posed by illicit finance.

“I can tell the House we will act decisively to protect our democracy, that will include a moratorium on all political donations made through cryptocurrencies. I hope that will be welcomed.”

The report also calls for a ban on foreign-funded online political ads.

In a sign of the scale of the problem, the report’s authors warned that social media posts on Scottish independence fell dramatically recenly when the Iranian authorities cut off internet service in the country.

The report was ordered after Reform UK’s former leader in Wales, Nathan Gill, was jailed for taking bribes to make pro-Russia statements while a member of the European Parliament.

It has urged MPs to cap donations from British nationals living abroad in order to protect Westminster from foreign interference.

Nigel Farage was forced to defend a £9 million donation from Thai-based crypto billionaire Christopher Harborne last year, insisting he “wants nothing from me”.

But the donation prompted concerns about political funding, as Mr Farage publicly promoted Tether, the cryptocurrency company that Mr Harborne is a shareholder in, shortly after receiving the donation.

Former top civil servant Philip Rycroft urged ministers to legislate for a moratorium in its Representation of the People Bill going through Parliament.

He wrote that this should be seen not as a “prelude to an outright and permanent ban” but an interlude for regulation to catch up to reality.

“The government should legislate in the Representation of the People Bill to introduce a moratorium on political donations made in crypto assets,” he wrote.

Few parties accept crypto donations, but Reform UK is the most prominent to do so.

Speaking to reporters, Mr Rycroft said he had spoken to Nigel Farage’s party while compiling the report.

Asked about the prospect of Reform feeling targeted by the crypto recommendation, he said: “I wasn’t here to look out for the interests of any political party, I was here to look out for the interest of our democratic processes.”

Attempts to use financial influence to infiltrate politics by gaining leverage and sowing division and distrust are not new but “arguably more acute”, Mr Rycroft noted.

He said he was “not pressing the panic button” but “ringing the alarm bell” on the issue and urged the government to “act swiftly” on his recommendations.

The Lib Dems said Mr Farage should “return all the crypto-donations he’s received from anonymous overseas sources.

Lib Dem cabinet spokeswoman Lisa Smart said: “Reform taking untraceable secretive crypto-donations to fund their Trump-style politics here in the UK should never have been allowed. Farage must return all the crypto donations he’s received from anonymous overseas sources or admit he’s happy to let foreign sources of money poison our politics in the UK.”

Reform UK has secured a second multimillion pound donation from Thailand-based businessman Christopher Harborne, who is also top crypto investor. Months after he gave the party £9m – the biggest single donation to a political party from a living person in UK history – he gave an additional £3m donation in November last year, the Electoral Commission said.

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