Sir Cameron, who owns seven theatres in the heart of London, will initially restore the Prince of Wales theatre.

His donation follows criticisms in recent interviews from Howard Panter, the head of the Ambassador Theatre Group, about the state of cleanliness in the West End.

Les Miserables is one of Sir Cameron's productions

Although Sir Cameron has made the same point himself in the past, he told BBC Radio 4's Today programme that he thought the "hassle" of travelling in the West End was a greater deterrent for visitors.

Sir Cameron currently has several successful productions in London's West End, including My Fair Lady, Les Miserables and Phantom of the Opera.

But a tourism slump has been affecting much of the West End over the last year.

Speaking on Radio 4's Today programme, Sir Cameron said he was not worried about the current prosperity of the West End.

Sir Cameron says his shows are doing well

He cited the success of new shows such as Bombay Dreams, and said his own shows had advanced bookings well into 2004.

But he added: "London is a real effort, it doesn't work properly, that's what visitors are feeling about it.

"And my friends who live in London are frustrated by what they see as a lack of pulling together to bring London back to what it is - essentially one of the greatest cities in the world."

London Mayor Ken Livingstone is to announce a campaign on Wednesday to discount theatre tickets to encourage more people to go - his second such initiative.

'Seedy'

However, Sir Cameron denied prices were putting people off.

He contrasted London with New York, where he said the former mayor, Rudolph Giuliani, had rejuvenated the city.

"What they realised in New York was that had to completely redo Time Square and redo 42nd Street to turn it from a seedy place into a centre of entertainment.

"That is why in the last five to eight years, Broadway has really resurged and people want to go there.

"I hear the opposite about London and I just want to see it changed - as everyone else does."