A Scots-born multi-millionaire fraudster and Liberal Democrat donor has been arrested in the Dominican Republic after going on the run.

Michael Brown was sentenced in absentia to seven years in jail after being convicted of fraud at Southwark Crown Court, London in 2008.

The Glasgow-born businessman donated around £2.4m to the Lib Dems ahead of the 2005 general election – the party’s largest donation to date.

A City of London Police spokesman said: "We are pleased to hear that Michael Brown has been detained by authorities in the Dominican Republic, and are currently establishing contact with them to find out further details about his arrest.

"Clearly, at some stage we will look for his return to the United Kingdom, so he can serve the sentence for the fraud offences for which he has been convicted in this country."

However, it is unclear how feasible this will be. The Dominican Republic does not have an extradition treaty with the UK.

An international manhunt was launched when Brown went on the run after stealing nearly £8m from the former chairman of Manchester United.

He posed as a highly successful bond dealer and claimed connections with royalty to steal the money from Martin Edwards.

He secretly used investors' money to fund the record donation to the Lib Dems' 2005 election war chest and also blew a large slice of his ill-gotten gains on an "extravagant" lifestyle.

A Lib Dem spokesman said: "The Electoral Commission inquiry in 2009 found that the party accepted the donation in good faith, and were in no way at fault.

"It cleared the party of all wrongdoing and accepted that at the time of the donation, Michael Brown was a permitted donor.

"There is no indication that the Electoral Commission will revise its opinion in this matter but any arrest abroad should lead to his extradition to the UK."