Leading businessman Brian Souter is to donate £500,000 to the Scottish National Party in the run-up to the Holyrood elections in May.
Mr Souter's donation takes the SNP above its £1m target
The head of the Stagecoach group said it was vital to correct the imbalance in funding in Scottish politics.
He said Scots had a definite right to self-determination.
Mr Souter, 52, previously funded the campaign to prevent the abolition of Section 28, the law which blocked the promotion of homosexuality in schools.
The Keep the Clause campaign was unsuccessful and the law was abolished in 2000.
The tycoon is known to be an SNP supporter but his donation has given the Nationalists a huge campaign boost.
Mr Souter's company, which began with two buses in Perth, now employs 31,000.
The donation means the SNP has already exceeded its target of raising £1m for the election.
SNP leader Alex Salmond set a new target of £1.75m at his party's conference in Glasgow.
Mr Souter's donation comes the day after former Royal Bank of Scotland chairman Sir George Mathewson announced he was supporting the SNP.
Mr Salmond said: "The SNP have the momentum. For the first time in Scottish political history, the SNP's positive and forward-looking campaign will be able to compete with Labour's negative scaremongering on a level financial playing field."
He added: "Brian Souter is one of the outstanding entrepreneurs of his generation, totally self-made and hugely successful.
"I am very grateful for his encouragement and support."
Justice Minister Cathy Jamieson told BBC Scotland: "I don't think the sum of money Brian Souter has donated - and obviously that's up to him as an individual - is the key issue here.
"The key issue would be the impact of the SNP's policies on the average family in Scotland.
"As Labour has shown this week, that means that the average family would be £5,000 a year worse off."
Green MSP Patrick Harvie called on all parties to condemn homophobia in the wake of Mr Souter's donation.
Mr Harvie, who is also a gay rights campaigner, said: "I call on all parties standing in the Scottish election to disassociate themselves from homophobic prejudice such as Mr Souter's former political enterprise.
"It is essential that serious politicians avoid any taint of pandering to bigotry, whether that be racial, religious, homophobic or any other kind."