LABOUR was urged to return its largest ever donation by its own MPs today after it emerged the £4 million “blood money” came from a hedge fund that stood to profit from Israel’s war in Gaza.

The party is said to “face serious questions” over its funding after an OpenDemocracy investigation revealed Quadrature Capital held £93m in shares in tech and logistics firms that have supported the ongoing massacre.

These include companies that help make Israeli F-35 fighter jets, which have been used in devastating air strikes on a “humanitarian zone.”

Labour accepted the gift shortly after the general election was announced in May, but days before it was legally required to make donations public until after the vote.

Analysis of financial documents filed with the US Securities and Exchange Commission (SEC) revealed that Quadrature Capital, which is owned via the Cayman Islands tax haven, held shares in a range of companies linked to Israel’s assault in Gaza.

The periodic snapshots of its corporate shareholdings on three separate dates in December 2023, March 2024 and June 2024, showed it held an average of £93m of shares in Lockheed Martin, Boeing, Caterpillar, Howmet Aerospace, Northrop Grumman, Oshkosh Corporation, Palantir and Woodward Inc.

Howmet Aerospace was formerly called Arconic Inc., which was rapped for supplying highly flammable cladding used on Grenfell Tower in the inquiry into the disaster.

MP for West Yorkshire Jon Trickett told the Morning Star: “Send the money back.”

Fellow backbencher Andy McDonald MP added: “If this is right then the Labour Party should be nowhere near this company.”

Former shadow chancellor John McDonell MP, currently suspended from the party, said: “This is not where any socialist party should be getting money from.”

Stop the War Coalition convener Lindsey German said the revelations can be of “no surprise to anyone who recognises Keir Starmer and David Lammy’s refusal to end all arms sales to Israel.”

She added: “Labour’s coffers are literally being filled by the profits of genocide and endless wars. This blood money must be returned.

“Labour has pledged a big increase in military spending, rewarding their friends in defence manufacturing with a massive bonanza, paid for by us taxpayers.”

She added that it is “no coincidence” that the Foreign Secretary David Lammy’s “extremely limited suspension of licences did not include F-35s, which we know have been used in the slaughter of civilians in Gaza and Lebanon.”

Palestine Solidarity Campaign director Ben Jamal said that it “defies belief” that Labour bosses think it is acceptable to take huge donations from the hedge fund while millions in Britain are desperate for the genocide to end.

He said: “Last month, David Lammy inexplicably excluded components for the deadly F-35 fighter jet from the decision to suspend arms exports to Israel, despite evidence that these jets have been used to massacre Palestinian civilians.

“Now we know that money made from the sale of those parts has found its way into Labour Party coffers.

“This money is stained with blood and should be returned immediately.”

The government has called an urgent meeting of the UN security council after the US warned Tel Aviv that more humanitarian aid must enter Gaza in the next 30 days or Israel could lose access to military financing.

In the Commons, Independent MP for Bradford East Imran Hussain said that “the seriousness of Israel’s violations of international law… could not be more obvious” as he called for an immediate end to all arms licences to Israel.

A spokesperson for Quadrature said its investment decisions were “fully automated” and dismissed the idea that its trading was linked to Israel’s war in Gaza.

“By that logic, most pension holders and most index tracker funds also own the stocks that you cite,” they said. 

“At any given time Quadrature will have long and short positions across many thousands of different stocks.”

They added that shares are not held for “any significant duration of time.”