Labour MPs have poured scorn over reported plans for a new political party said to have been in secret development for more than a year.

The movement, led by a former Labour donor, has access to £50m in funding and comprises a network of entrepreneurs, philanthropists and donors keen to “break the Westminster mould”, according to The Observer.

The idea for a centrist challenger party was dismissed by John McDonnell, the shadow chancellor, and two of his frontbench colleagues on Sunday.

“That’s a novel idea,” Mr McDonnell wrote on Twitter. “A party of the rich, by the rich, for the rich. A party for the few not the many.”

Jonathan Ashworth, the shadow health and social care secretary, said: “For goodness sake, what a daft waste of time. Anyone putting money into this nonsense would be better off investing in our campaign to restore and rebuild our NHS.”

Jon Trickett, the shadow Cabinet Office minister, tweeted: “A new political party with £50m in the kitty, no members, no rulebook, no ideology. Perhaps with support from sections of the British establishment. A plaything for the rich?

“Let’s focus on the task in hand: building a social movement which will change our country for good.”

Their sentiments were echoed by Colne Valley MP Thelma Walker, who said it was “just what our country doesn’t need”, while Manchester Central MP Lucy Powell tweeted: “Sounds like a bad idea, over-hyped.”

The project, which is also reported to include a number of former Tory donors, has had full-time staff members for up to a year, according to The Observer.

Led by Simon Franks, a multimillionaire and founder of LoveFilm, there is allegedly agreement to run candidates in the next general election, due in 2022, should the other parties not be offering a centrist platform.

A new centrist party could prove a particular headache for the Liberal Democrats, whose popularity has not recovered since the end of the coalition government in 2015.

It could also pose fresh problems for Labour, with MPs divided over the direction of Jeremy Corbyn’s leadership.

Additional reporting by PA