Bernard Madoff, the disgraced financier accused of the biggest fraud in corporate history, was accused of having "blood on his hands" after a former soldier killed himself over the loss of his family’s life savings.

The son of William Foxton, 65, said that his father was so distraught after losing his family’s entire savings in the alleged Ponzi scheme that he shot himself with a handgun in a park in Southampton on Tuesday.

Mr Madoff, 70, is under penthouse arrest and 24-hour surveillance after being arrested on December 11.

He was accused of one count of securities fraud after authorities said that he admitted to running a scheme over many years with losses of $50 billion (£35 billion).

Willard Foxton, of London, said that his father, a grandfather of two and a former French Foreign Legionnaire, was “brought low by the greed of Bernie Madoff”.

Mr Foxton said: “I spoke with my father recently and he confided in me that he was in ‘an absolute s***fight’ with his banks’, as his life savings had been invested in two hedge funds: the Herald USA Fund and Herald Luxembourg Fund.

“He had found out that the offices of these funds had closed and that the money had in fact been invested in the Madoff hedge funds.

“I think it’s disgusting that Bernie Madoff is sitting in his New York property, thinking that all he did was steal money, when, in fact, what he was really doing was ruining lives.

“I feel a little helpless at the moment. Essentially I want Madoff and others involved in Herald funds to know that they have my father’s blood on their hands,” he said.

The late Mr Foxton served with the French Foreign Legion before joining the British Army in 1969 and working his way up to major.

The father of two two had his arm replaced with a metal artificial limb and, after leaving the Forces in 1986, was appointed MBE for services to the disabled.

He later worked for the UN in the Balkans, where he was head of the European Commission Monitoring Mission during the Yugoslavian wars. He was appointed OBE in 1999.

His last overseas trip was running humanitarian projects in Afghanistan before his retirement last year.

This week Mr Madoff agreed to a partial judgment in the civil case brought by the US Securities and Exchange Commision without admitting or denying fraud charges.

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