Labour has written to Rishi Sunak calling for him to hand back £10m in donations from the Conservatives’ biggest ever donor, after it emerged he told colleagues that looking at Diane Abbott made you “want to hate all black women” and said the MP “should be shot”.

Anneliese Dodds, the chair of the Labour party, wrote to the prime minister calling for the money to be returned after the Guardian published details of Frank Hester’s remarks from a meeting held at his company, TPP, in 2019.

The businessman, who has given £10m to the Tories in the past year, said in the meeting that he did not hate all black women. But he also said that seeing Abbott, who is Britain’s longest-serving black MP, on TV meant “you just want to hate all black women because she’s there”.

TPP’s lawyers, Carter-Ruck, said the comments were not a true or accurate characterisation of the company or Hester.

In a new statement on Monday night, a spokesperson for Hester said he “accepts that he was rude about Diane Abbott in a private meeting several years ago but his criticism had nothing to do with her gender nor colour of skin.

“The Guardian is right when it quotes Frank saying he abhors racism, not least because he experienced it as the child of Irish immigrants in the 1970s. He rang Diane Abbott twice today to try to apologise directly for the hurt he has caused her, and is deeply sorry for his remarks. He wishes to make it clear that he regards racism as a poison which has no place in public life.”

In parliament on Monday, Wes Streeting, the shadow health secretary, said Hester had used “utterly revolting, racist and inciteful language”, adding that “it has no place in our politics and public life”.

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'I don't buy that': Keir Starmer responds to Frank Hester's apology to Diane Abbott – video

In her letter to the prime minister, Dodds said the Conservatives should hand back the £10m as well as the value of a helicopter ride to the tune of £15,900 provided to Sunak by Hester.

She wrote: “While – in good faith – we assume that your party was not aware of Mr Hester’s views at the time of receiving these donations, it is only right that you and your party take these new revelations into account seriously.

“Accepting and using that money can only be treated as implicitly condoning and overlooking his deeply disturbing comments and the way he has run his business. Anything less than returning the money will be a stain on the Conservative party.”

She also highlighted that, in February, Hester had spoken about his access to Sunak, claiming that “I’ve had some quite long conversations with Rishi about AI”.

Hester’s remarks were criticised by some Conservatives. Sir Bob Neill, the Conservative MP and chair of the justice committee, told Times Radio: “It’s a stupid and offensive thing to say ... That’s not the sort of language that you should use about anyone that, frankly.”

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Alistair Burt, the former Conservative minister, said: “If true, and it appears to be, it is open and shut for the Conservative party. Return the donations, end the relationship and ask decent donors to make up the difference. With MPs under threat, and past murders, this is unacceptable. Many Conservative members will be watching.”

The Liberal Democrats also called for Sunak to rule out giving a peerage to Hester, as well as handing the donations back.

Wendy Chamberlain, the Liberal Democrat chief whip, said: “These comments are inexcusable and disgusting. Ultimately the buck stops with Rishi Sunak.

“He must reassure the public that the Conservative party does not tolerate these remarks. That means confirming that his party will return every penny of these donations and won’t take any more from this donor in future. He must also rule out any future peerage for Frank Hester.”

Hester gave £5m to the Conservatives in May 2023 and announced a further £5m donation this month, which had been accepted by the party from his company in November last year. With months to go before the next general election, a party spokesperson confirmed he was now its “biggest ever donor”.

The Conservatives told LBC: “Mr Hester has made clear that while he was rude, his criticism had nothing to do with her gender nor the colour of her skin. He has since apologised.”