By Kylie MacLellan
LONDON (Reuters) - Britain's opposition Labour Party would face Armageddon if it were to split following its bitter leadership contest, the party's top individual donor said on Tuesday.
Labour has been embroiled in a divisive battle over its future direction since Britain's June 23 vote to leave the European Union, with leader Jeremy Corbyn being challenged for his job less than a year after being elected.
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The debate has pitted grassroots activists loyal to left-winger Corbyn against most of the party's lawmakers, who say he lacks the public appeal to win an election. Some believe the 116-year-old party could split if bookmakers' favorite Corbyn is re-elected.
"I really hope the Labour Party doesn't split," millionaire businessman John Mills, a veteran Labour supporter, told reporters.
"You are then going to split the left-of-centre vote and I'd have thought this really would be Armageddon for members of parliament ... the downsides of having a split are so huge."
Mills, a majority shareholder of import-export and distribution company JML, gave the party 1.65 million pounds ($2.2 million) in shares in his company in 2013 and has also made cash donations, including 10,000 pounds ahead of last year's national election.
The businessman said he was not yet backing either Corbyn or rival candidate Owen Smith for the leadership.
Mills, who campaigned to leave the EU, said he did not agree with Smith's proposal for a second referendum on the eventual Brexit deal, but said the leadership challenger may be better able to reconnect with Labour's heartlands than Corbyn.
The anti-EU UK Independence Party has made inroads in many former Labour strongholds and Mills said there was a risk of a "disastrous" situation in which Labour lost as many as 50 seats in the north of England and midlands.
The divisions within the party were now worse than in the 1980s, when a small number of lawmakers broke away and formed a new party, Mills said, but he was hopeful it could re-unite.
"If Jeremy Corbyn is re-elected ... there is really nothing much it can do if it isn't going to split except for the Labour MPs just to buckle down and wait for the situation to change, maybe wait for Corbyn's support among the Labour Party to start slipping," he said.
"Politics is all about ups and downs ... I don't think that the long term prospects of the Labour Party are necessarily as dire as they might appear but obviously there is huge amount to pull back from where we are now."
(Reporting by Kylie MacLellan; editing by Stephen Addison)