LONDON — British law enforcement and elections officials said they will not investigate a major political donation to the Conservative Party that had been flagged as a suspected illegal campaign donation in documents linking it to a Russian bank account.

The decision, announced late Thursday, lifts a legal cloud over one of the largest donations that helped propel Prime Minister Boris Johnson and his party to victory in the 2019 election. Lawmakers from the opposition Labour Party said the decision reveals a campaign-finance loophole that could be used by bad actors.

The contribution, of $630,225, was made in February 2018 by Ehud Sheleg, a wealthy London art dealer and one of the Conservative Party’s biggest donors. He was most recently the party’s treasurer.

“We are able to trace a clear line back from this donation to its ultimate source,” the bank wrote in a January 2021 alert to the National Crime Agency.

Mr. Kopytov, a Ukrainian citizen, served in the country’s previous pro-Kremlin government and, according to the latest Russian corporate filings, owns businesses in Crimea and Russia.

Mr. Kopytov and Mr. Sheleg, through lawyers, have denied any wrongdoing and said that Mr. Sheleg had been “completely exonerated.” They acknowledged that, weeks before he donated to the Conservative Party, Mr. Sheleg received millions of dollars from Mr. Kopytov. Their lawyer, Thomas Rudkin, said the money was a family gift and not intended as a political donation.

Political parties are prohibited from accepting donations of more than 500 pounds (about $615) from foreign citizens who are not registered to vote in Britain. Mr. Kopytov is not listed on the national voter register, records show.

Both the National Crime Agency and the Electoral Commission, which enforces campaign finance laws, said in statements to The Times that they had decided not to open investigations after finding “no evidence” of an offense.

The National Crime Agency issued a similar statement in a letter to a Labour lawmaker.

“Provided a donation comes from a permissible source, and was the decision of the donor themselves, it is permitted,” Steve Rodhouse, the agency’s deputy chief wrote in a letter. “This remains the case even if the donor’s funds derived from a gift from an overseas individual.”

Labour lawmakers called this a loophole that would allow foreign citizens to funnel contributions through British donors.

“A person can give unlimited amounts of money to political parties if they are laundered through the bank account of a U.K. citizen,” said Liam Byrne, a Labour lawmaker, in a Parliamentary debate on Monday.

“That is utter nonsense,” he added. “No doubt Mr. Sheleg is an honorable man, but the Sheleg maneuver could be exploited by all kinds of bad actors.”

Before deciding not to open an investigation, the National Crime Agency met with its lawyers and determined that it would not be possible to bring a realistic prosecution because of weaknesses in political financing laws, according to a law enforcement official, who spoke on condition of anonymity because the official was not authorized to discuss details of the case.

Russia’s invasion of Ukraine has placed a spotlight on illicit money in Britain, and a push is underway to tighten campaign funding laws amid fears of corruption and foreign influence.

At the same time, however, the nation’s lead campaign-finance watchdog, the Electoral Commission, is fighting for survival. It has asked for greater powers to investigate donations for potential money laundering. But the Conservatives have branded the agency “not fit for purpose” and threatened to overhaul it.

“We have made recommendations to improve the controls on donations and loans to prevent foreign money being used in U.K. politics,” a spokeswoman for the Electoral Commission said.

The Conservative Party did not respond for a request for comment

In letters through his lawyer, Mr. Kopytov said he had no interest in British politics. He said he “is and was anti-Putin” and had served in various Ukrainian governments, not only the pro-Kremlin government of Viktor Yanukovych.

The suspicious-activity report identified Mr. Kopytov as living in Russia. His lawyers say he was actually living in Ukraine. They said he lost his job as finance minister and deputy prime minister of Crimea following its annexation by Russia. He is now a refugee in the Czech Republic, they added, and has had his Crimean businesses nationalized by Russia.