An independent MP involved in the founding of Jeremy Corbyn’s new left-wing party has announced he is leaving the project.

Adnan Hussain said he would be “stepping away” from the steering group of the movement currently operating under the name Your Party – citing a “toxic” culture particularly towards “Muslim men”.

The Blackburn MP also alleged a “pattern of clique-like behaviour and gatekeeping” and a party “dominated by persistent infighting”.

Hussain’s resignation comes only hours after he signed a joint statement criticising Zarah Sultana, a fellow founder of Your Party, for transferring £200,000 from a reported £800,000 at the centre of major split in the party.

In his letter, Hussain said he had believed he was signing up to “building a political home with mass appeal” and “a force capable of challenging the rise of far-right rhetoric”.

“Regrettably, the reality I encountered has been far from this vision.

“The culture surrounding the party has become dominated by persistent infighting, factional competition and a struggle for power, position and influence rather than a shared commitment to the common good.

“Instead of openness, cooperation and outward focus, the environment has too often felt toxic, exclusionary and deeply disheartening.”

The Blackburn MP added: “I have also been deeply troubled by the way certain figures within the steering process, particularly Muslim men, have been spoken about and treated.

“At times the rhetoric used has been disturbingly similar to the very political forces the left claims to oppose. I witnessed insinuations about capability, dismissive attitudes and language that carried, at the very least, veiled prejudice.”

Hussain’s resignation is just the latest split in the fledgling party which has been dominated by rows since it was launched in July over everything from its leadership, finances and even its name.

He had been one of six Independent MPs overseeing the founding of Your Party, alongside Corbyn and Sultana.

And before resigning Hussain had put his name to a letter criticising Sultana for failing to transfer an estimated £800,000 of Your Party donations held by a company she controls.

The money is held by MoU Operations Ltd, who collected the initial waves of donations while Your Party was being formally registered.

On Thursday, Sultana transferred the first £200,000 – promising “further instalments will be paid as soon as possible, as the legal details are ironed out.”

But the five MPs who at that point were overseeing the founding of Your Party – Corbyn, Hussain, Shockat Adam, Ayoub Khan and Iqbal Mohamed – called the sum “insufficient” and said they would pursue immediate recovery of the rest.

In a joint statement the group, issued before Hussain quit, they said: “Building a democratic party from the ground up was never going to be smooth sailing. Some of the difficulties we have faced were inevitable, but others were deliberate acts.

“A dedicated team of volunteers has been working on a shoestring budget to deliver a founding conference at the end of the month.

“Their efforts are heroic, but without funding Your Party’s capacity has been severely restricted.”

The group pledged to “continue to pursue the immediate transfer of all the money” and resolve “outstanding legal issues”.

Your Party insiders say the funds are essential to enable the party’s first conference, taking place on 29 November, where delegates will set the name, the rules and the leadership model.

A source in the party said it would likely be “forced to reduce delegate numbers” at the event.

Sultana’s team insists she is acting responsibly as she “is still legally responsible for ensuring the company is properly run”.

A spokesperson for Sultana said “briefings of possible liabilities are overblown,” but added “all remaining funds will be transferred to Your Party once the company’s costs and liabilities are settled in full”.

“Zarah did not seek to become sole director of MOU Operations Ltd, but was prepared to take on this responsibility after the other five Independent Alliance MPs declined to join her as co-directors,” the spokesperson said.

“Further instalments will be paid as soon as possible, as the legal details are ironed out.”

Another £200,000 is scheduled for 19 November, with a third payment of £200,000 due on 26 November – just three days before the party’s founding conference in Liverpool.