She was a senior unofficial member of the Legislative Council in the 1980s and was later appointed to the Executive Council. She was made a peer in 1990 and is known as Baroness Dunn of Hong Kong Island and Knightsbridge.

In a letter to the Lords' clerk, she wrote that she had been living and working in Hong Kong - her birthplace - when offered a peerage in 1990.

'I have naturally retained my Chinese roots and Hong Kong domicile and connections,' the Financial Times quoted the letter as saying.

'If the statute had given me a reasonable length of time in which to make transitional adjustments to my personal affairs, I would have wished to retain my seat.'

Four other peers also quit the House, including architect Norman Foster, designer of the HSBC headquarters and Chek Lap Kok airport.

The resignations follow a requirement for peers to pay tax on their worldwide earnings.

A measure to ban people with non-domiciled status from sitting in Parliament was part of the Constitutional Reform and Governance Act passed earlier this year. A 'non-dom', as they are known, is someone who lives in the United Kingdom but does not pay tax on earnings made outside the country.

A British citizen can register for non-dom status by showing strong affiliation with another country where they were either born or where their parents were born. Peers had until midnight on Wednesday to choose between their non-domiciled tax status and their seat in the House.

Dunn reportedly quit last week.

An information officer at the House of Lords confirmed yesterday that 'Baroness Dunn is no longer a member of the House of Lords' but would not comment further.

According to the Register of the Lords' Interest in June, Dunn is an executive director of John Swire and Sons, privately owned parent company of the Swire Group. She also owns an undisclosed number of HSBC shares and a flat in Hong Kong.

For many years she played the role of the city's unofficial trade ambassador. When chairwoman of the Trade Development Council, she regularly shuttled from London to New York, Amsterdam to Tokyo.

She made headlines when she broke into tears at a House of Commons debate on Hong Kong after the June 4 crackdown.

A row has blown up in Britain because the peers can keep their titles.

Sir Alistair Graham, former chairman of the Committee on Standards in Public Life, was quoted by the Daily Mail yesterday as saying: 'It is absurd - you're no longer a member of the club, so you shouldn't be able to use the title. 'I sincerely hope all titles will go in due course - and I'm surprised these peers are not voluntarily giving up their titles.'

Dunn has in recent years adopted a retiring public image and has lived in London with her husband Michael Thomas, a former attorney general of Hong Kong, since the mid-1990s.

Turning 70 this year, she auctioned 160 items from her private art collection at Christie's, with lots reportedly valued at up to GBP30,000 (HK$354,000) each.

Most lords in the upper parliamentary chamber are appointed by Queen Elizabeth on the recommendation of the prime minister or Lords' Appointments Commission.