The Scottish Conservatives have urged colleagues in the UK party to "carefully review" donations from Frank Hester, the businessman at the centre of a race row.
A party spokesperson said comments made by the donor, uncovered by the Guardian, were "racist and wrong."
However, Rishi Sunak shows no sign of handing back the £10m given to his by party by the the chief executive of healthcare software firm The Phoenix Partnership.
During Prime Minister's Questions, he told MPs that Mr Hester had "apologised genuinely for his comments and that remorse should be accepted."
READ MORE: Tories would take more money from Frank Hester, says minister
According to the Guardian, Mr Hester is alleged to have said Diane Abbott, Britain’s longest-serving black MP, made him “want to hate all black women” and that she “should be shot”.
The paper also reported that he allegedly referred to “no room for the Indians” during a crowded meeting, and suggested they “climb on the roof, like on the roof of the train there”.
The call for the UK party to review the donation came after Scottish Labour's deputy leader, Dame Jackie wrote to Douglas Ross to say voters would be "appalled if your party used this money in the coming election given its source."
She added: “It would be helpful for you to clearly state that you will not benefit from the donation of Mr Hester.”
In response, a Scottish Tory spokesperson told The Herald: “These comments were racist and wrong.
“The Scottish Conservative Party has never accepted a donation from Frank Hester and the UK Conservative Party should carefully review the donations it has received from Hester in response to his remarks.”
READ MORE: Police Scotland to use Glasgow sex shop as hate crime reporting centre
It adds to more pressure on the Prime Minister.
Earlier in the day, Andy Street, the Tory mayor for the West Midlands, said he would return the cash.
He told BBC Radio 4’s Today programme: “I would think about the company I kept and I would give that money back.”
However, Kevin Hollinrake, the UK Government's Post Office minister later suggested the Tories would take more money from Mr Hester if offered.
Mr Hester's comments were raised during Prime Minister’s Questions, with labour leader Sir Keir Starmer asking Rishi Sunak if he was “proud to be bankrolled by someone using racist and misogynistic language when he says the Member for Hackney North and Stoke Newington (Diane Abbott) ‘makes you want to hate all black women?'”
The Tory leader replied: “The alleged comments were wrong, they were racist, he has rightly apologised for them and that remorse should be accepted.
“There is no place for racism in Britain, and the Government I lead is living proof of that.”
Sir Keir told the Commons: “The man bankrolling the Prime Minister also said that the Member for Hackney North and Stoke Newington should be shot.
“How low would he have to sink, what racist, woman-hating threat of violence would he have to make before the Prime Minister plucked up the courage to hand back the £10 million that he’s taken from him?”
Mr Sunak replied: “As I said, the gentleman apologised genuinely for his comments and that remorse should be accepted.
“But he talks about language, he might want to reflect on the double standards of his deputy leader calling her opponents scum, his shadow foreign secretary comparing Conservatives to Nazis and the man that he wanted to make chancellor talking about lynching a female minister.
“His silence on that speaks volumes.”
READ MORE: Biggest Conservative donor accused of racist Diane Abbot comments
The SNP’s Westminster leader said Mr Sunak was “putting money before morals.”
The Prime Minister replied: “As I said, the comments were wrong. The gentleman in question has apologised for them and that remorse should be accepted.”
Mr Flynn said the Tory leader’s answer was “complete rubbish.”
He added: “The gentleman in question apologised for being rude. He wasn't rude. He was racist. He was odious, and he was downright bloody dangerous.”
The SNP MP pointed to comments made by No 10 ahead of the UK Government's new extremism strategy. Downing Street has warned about “an unacceptable rise in extremist activity which is seeking to divide our society and hijack our democratic institutions.”
“Isn’t the extremism that we should all be worried about the views of those Tory donors that we've read about this week?” Mr Flynn asked.
“No, there has actually been a rise in extremist activity that is seeking to hijack our democratic institutions. It's important that we have the tools to tackle this threat. That's what the extremism strategy will do.”
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