The Cavendish Laboratory, the University of Cambridge’s Department of Physics, will receive a £20 million donation from a wealthy City hedge fund manager, the largest in its 136-year history.

Coming at a time when institutions of higher learning across the country are facing punishing spending cuts, the pledge has been well received by the University authorities.

The donor, David Harding, 49, studied theoretical physics at Cambridge before founding Winton Capital Management in 1997, a hedge fund that predicts swings in commodity prices.

The company is known for employing highly trained PhDs in such esoteric subjects as extragalactic astrophysics and artificial intelligence.

Mr Harding’s gift will set up and fund ‘The Winton Programme for the Physics of Sustainability’, an outfit he hopes will "develop materials with seemingly miraculous properties that could combat the growing effect humans are having on the planet."

The Vice-Chancellor of the University, Professor Sir Leszek Borysiewicz, unequivocally praised Mr Harding’s donation as "truly exceptional both in its generosity and in its vision of translating fundamental discoveries in physics, to meet one of the most pressing needs of our generation.

However, sections of the student body have not met the news with such enthusiasm. Ashley Walsh, Chair of the Cambridge Universities Labour Club, expressed unease at the idea of the University coming to rely on private donors: "I do not believe that the entirety, or the majority, of the system should be funded by wealthy private individuals."

The Cavendish laboratory has produced 29 Nobel Prize winners.