The Conservative party has lost potentially thousands of pounds after a wealthy backer withdrew his support in protest at David Cameron's "arrogant" old Etonian style of leadership.
Sir Tim Cowie said he was "very, very disappointed" with the Conservative leader and will no longer fund the party.
The self-made businessman donated more than £630,000 to the party since 2001, including £500,000 to help Michael Howard's failed election campaign in 2005.
In an interview with the Guardian, Sir Tim said he was now disappointed with Mr Cameron's attempts to modernise the party.
He singled out the Grammar schools row and Mr Cameron's Rwandan trip for particular criticism.
Asked what he thought of the Tories under Mr Cameron, Sir Tim replied: "Are you sure you don't want to hear foul language? ... All I can say is I am very, very disappointed with the state of the party. I will not mince my words: I shan't send them any more money."
A spokesman for David Cameron said Sir Tim was resistant to the modernised Tory party.
Sir Tim will not be switching his allegiance to Gordon Brown, criticising the prime minister over taxes on pension funds dividends.
Instead Sir Tim, who is life president of the bus and train operator Arriva, will donate to the Prince's Trust, which helps young people start up their own businesses.
Sir Tim was especially critical of the Conservative's support for city academies and decision not to build anymore grammar schools.
He said the privileged education of Mr Cameron and his inner-circle had made them overlook the benefits of grammar schools.
Sir Tim said: "I come from a very humble background and I passed my 11-plus which means I got to grammar school. This made all the difference to my life. It took me into a different world, and to take this away from other people is not right.
"The Tory party seems to be run now by Old Etonians and they don't seem to understand how other people live. They seem to be very arrogant like I suppose Old Etonians can be. They certainly don't understand about grammar schools."
He also said it was unwise of Mr Cameron to continue with a planned trip to Rwanda while his Witney constituency was under water.
Sir Tim, who has donated to every Tory leader since William Hague, said he was initially impressed with Mr Cameron.
On first meeting the new party leader he described him as "very bright, very breezy, very confident".
A spokesman for Mr Cameron said: "The Conservative Party is changing under David Cameron and as a result many new supporters and donors have been attracted to the party.
"There will always be a few people who feel uncomfortable with the changes that need to be made but now is not the time to abandon our strategy but to re-affirm it."
This is the latest high profile attack on Mr Cameron, who has been beset with criticisms over his handling of the grammar schools row and summer flooding.
Despite trailing Mr Brown in the opinion polls - and now financial setbacks - Mr Cameron insists the Tories are ready for a snap election.