The vice-chairman of Waltham Forest Race Equality Council fears a man’s £500,000 donation to the BNP will increase divisions in the borough.

Alfred Starmore, 77, of Buxton Road in Chingford, gave the party its largest ever donation after leaving his entire life savings to the controversial political group, amounting to £290,000, while the party recently sold his three-bed flat for £200,000, which he had bequeathed to them.

The BNP plans to use the money to fund a bolstered campaign at the next general election, after a poor showing in 2010 when it received just 1.9 per cent of the vote.

Afzal Malik slammed the news, saying the revitalised campaign could raise cultural tensions in Waltham Forest.

He said: “This is bad news for community relations. I have lived here for many years and over that time Waltham Forest has become a multicultural place to live.

“People coming from India and Pakistan, they’re peaceful and they have contributed to the prosperity of the borough and the country.

“The donation could be used to create divisions here. But the community can overcome these difficulties, Waltham Forest is strong and people generally support the variety of cultures we have.”

Conservative group deputy leader Cllr Michael Lewis, who represents Chingford Green ward, also slammed the BNP and said it would never do well in Waltham Forest.

He said: “We as a party and Waltham Forest as a whole completely oppose what they stand for.

"They will have no luck in Chingford or the borough, they’ve always done very badly.

“They are racist. But we live in a free country and people can express their views, whatever they are.”

Mr Starmore had no living relatives, and was widely considered a recluse when he passed away in October 2011.

The BNP’s London spokesman, Steve Squire, said: “We honestly didn’t think it was as much as that. It’s double our largest donation. He’s given us the tools to carry on.

“Naturally we were delighted that he was so generous. We’re not in debt now. It’s fantastic.”

The BNP, which denies it is racist, said they paid for Mr Starmore’s funeral, as he had been a member of the party for more than 30 years.

The party even claimed that leader Nick Griffin attended the service at Chingford Mount Cemetery to pay his respects.