Anger as hedge fund boss and Tory donor knighted

The government has come under fire for rewarding its "friends in the City" after it gave a knighthood to Paul Ruddock, founder of hedge fund Lansdowne Partners, in its New Year's honours list.

Ruddock's firm made £100m for its clients during the credit crisis by betting on the price of Northern Rock shares falling.

Ruddock is also a senior Conservative party donor, sparking allegations from the Labour party that the honours have been awarded unfairly, the Daily Mail reports.

Other honours recipients include investment banker James Lupton and former Aston Villa chairman Doug Ellis, who have also donated hundreds of thousands to the Conservatives.

Conservative spokespeople have insisted the honours list is decided by an independent panel which is not biased towards the government.

Andrew Sentance, former member of the Bank of England's monetary policy committee, will also receive an honour.

Sentance repeatedly called for the Bank to raise the base rate from 0.5%, before resigning from the committee in June.