The son of a mentally deluded man who believed that Margaret Thatcher could save the world from a satanic plot is fighting the Conservative Party over who should get his father’s £10 million bequest.

The pharmaceutical mogul Branislav Kostic left a will giving his entire fortune to the Tories after deciding that his relatives were part of an international conspiracy of dark forces out to kill him.

The document was drawn up during the Thatcher era by a law firm with Conservative connections whose senior partner the sick man addressed as “Saint Anthony”, according to papers put before the High Court.

The extraordinary tale unrolled before Mr Justice Henderson in Court Number 60 yesterday. The previous highest single gifts to the party were £5 million each from Sir Paul Getty and the businessman Stuart Wheeler.

“Rare flashes of insight apart, Bane [the donor's nickname] had no understanding of his illness, nor of the impact it had on those around him,” Clare Montgomery, QC, for the disinherited son Zoran, said. “Although his disorder was treatable, he did not seek professional psychiatric help. The Conservatives only benefited because Bane was mentally ill.”

Mr Kostic, from Ealing, West London, died aged 80 in 2005 leaving £8.3 million, which is now understood to have grown to nearer £10 million.

The Belgrade-born tycoon was the perfect family man until he became gripped by delusions around 1984. His beliefs in plots to kill him poisoned his relationships with his wife, sister, mother, friends, advisers, bankers and colleagues. He thought that his own solicitors and accountants were part of a conspiracy to destroy the world.

The deluded Mr Kostic believed that he was victim of “a devilish organisation by three monster ladies”. He accused his wife of stealing his passport and money and being a nymphomaniac with numerous male and female lovers. He believed his mother and sister conspired to kill his father and brother-in-law.

In a note to Scotland Yard, he reported a 100-strong international vice ring was attempting to poison him. He told a detective that he had deposited their names in a yellow tennis bag.

The Conservatives, however, he saw as a bulwark against the “satans”. He wrote to his Tory MP, David Mellor, asking for help against the “dark forces” that had led to his car phone being used without authority. “It is quite clear that Bane was deranged,” Miss Montgomery stated in her opening address.

Mr Mellor’s response was to express concern about “these difficulties” and assert that he was “always ready to help”. Other figures in the Conservative Party would humour Mr Kostic by commenting that they found his deluded ramblings “very interesting reading”, the court was told.

Mr Kostic wrote to Mrs Thatcher at Downing Street in 1985: “I believe you are the only person in the free world who can save us from the bestial monsters. It seems to me that someone (not Gaddafi, IRA, Palestinians or Mafia, they are only the marionettes) organised many years ago a type of international university to study human weakness . . . I am sending a cheque for £5,000 to fight the evil wicked demons and SATANS and I am fully at your disposal.”

Although Tory policy was to refuse donations if there were any doubts about a benefactor’s capacity, Mr Kostic’s offerings were, it is claimed, accepted with alacrity. He once gave £13,000 “in the name of the magic number 13”

Mr Kostic had made a will in 1974 leaving his riches to his only son Zoran, at that time 17. But in 1987 he wrote to Mr Mellor: “I have to make my will . . . It is important to me that this wealth doesn’t finish up in the hands of destructive people — satanic monsters.” Mr Mellor declined to assist. Nevertheless, the court was told, Mr Kostic appears to have been introduced to the Tory-connected legal firm of Trowers & Hamlins through party channels. Mr Kostic met Sir Henry Lee, secretary to the Conservative Party Association, a section of Tory HQ that deals with legacies. The donor was introduced days later to Anthony Trower, an executive committee member of the association.

Mr Kostic signed a fresh will giving his fortune to the Conservatives but then asked for it to be destroyed because he would rather die intestate than leave them his money. Soon afterwards a final will was executed leaving Mr Kostic’s entire estate to the Conservatives following a long lunch at Simpson’s in the Strand.

Lawyers for the Conservative Party Association argued yesterday that the old man’s paranoid delusions had not poisoned his affection for his son.

Andrew Simmonds, QC, spoke of Mr Kostic’s “long-standing affection for the Conservative Party and his admiration for Mrs Thatcher”. Zoran Kostic, speaking on behalf of family members through his solicitor Robert Hunter, from Allen & Overy, said: “My father’s mental illness was our own personal tragedy. We think that the public will be able to decide for themselves what has happened here.”

The hearing continues.

Explore Law

• Columnists

• Law Panel

• Law Reports

• Student Law

Times Recommends

• The best legal yarns this Christmas
• Legal school 'earned £1m by exploiting bar course'
• Axe may fall on 5,000 more City lawyers