One of Britain’s richest men has given warning that the gap between rich and poor could eventually lead to violence and rioting on the streets.

Sir Ronald Cohen, founder of Apax Partners, the private equity firm, and a close ally of Gordon Brown, said in an interview that if people are “left behind” in the race to accumulate riches, Britain could see a repeat of the Paris riots two years ago.

His comments struck a different note from those of four of the other main players in the private equity industry, who sought to dispel their reputation as corporate “asset strippers” when they appeared before the Commons Treasury Committee yesterday.

The four tried to rescue their battered image claiming that they were a “force for good” in the British economy.

Trade union leaders who gave evidence to the same hearing had likened the secrecy with which the private equity industry operated to the Mafia.

Sir Ronald, an Egyptian-born millionaire and big Labour donor who has an estimated £260 million fortune, highlighted his concerns about the future for Britain’s haves and have-nots, saying that the widening gap was "something to be concerned about".

In an interview with the Daily Mail, he said: “Entrepreneurial economies which have high rates of growth and high rates of job creation do lead to great divergences in wealth.

“When economic situations get bad, it takes a spark to ignite a violent reaction.”

His spokesman told the newspaper later: “He was referring to how when people get left behind, when young men get left behind, for economic or welfare reasons, it can lead to violence, such as during the riots in Paris.”

Sir Ronald has been accused of having non-domiciled tax status in the UK, meaning he escapes paying tax on income held overseas.

In the hearing before the Treasury select committee, Dominic Murphy of Kohlberg Kravis Roberts, which recently took over Boots, claimed however that the private equity industry delivered increased employment, increased investment and increased growth.

He dismissed suggestions that the industry simply took advantage of low interest rates to buy firms in highly “leveraged” deals, only to slash the workforce and sell off the assets, before selling them on at a vast profit.

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