Michael Brown, the Liberal Democrats' biggest political donor, has been arrested in Spain and faces prosecution in Britain for offences ranging from perjury to obtaining a passport by deception, it emerged yesterday

The businessman, who gave the party £2.4m last year, was arrested on the island of Mallorca on Wednesday. The Crown Prosecution Service said it had applied for a European arrest warrant on April 13 on behalf of solicitors acting for HSBC, which is involved in a High Court civil action against Mr Brown.