The American presidential candidate released a statement attacking a decision by Parliament to debate whether to keep him out of Britain after his call for Muslims to be barred from entering the US. He said any decision to ban him from Britain would "send a terrible message to the world that the United Kingdom opposes free speech".
The Republican presidential contender also threatened to suspend investment in his Scottish golf and hotel businesses but MPs said this country should not be "held to ransom by corrosive billionaire politicians".
Trump prompted an outcry after his call for a ban on Muslims last month, and then prompted widespread criticism from British politicians by saying parts of London were so radicalised they were "no-go areas".
The billionaire responded by warning that he would stop investing in the two Scottish gold courses he owns if he is banned.
His organisation claimed that he had been planning to invest more than £200 million at Turnberry golf course in South Ayrshire and a further £500 million in Trump International Golf Links near Aberdeen.
"Westminster would create a dangerous precedent and send a terrible message to the world that the United Kingdom opposes free speech and has no interest in attracting inward investment," it said in a statement.
"This would also alienate the many millions of United States citizens who wholeheartedly support Mr Trump and have made him the forerunner by far in the 2016 presidential election."
Prime Minister David Cameron has made it clear that he does not support banning Trump from the UK, saying that he should be allowed to come to Britain so people can debate his "divisive" comments.
But Tulip Siddiq, a Muslim Labour MP, said: "The United Kingdom should not be held to ransom by corrosive billionaire politicians. In our country, money doesn't buy the right to sew discord and hatred in our communities."
Tim Farron, the Liberal Democrat leader, said the threat showed Trump "to be the party clown that he is" and added: "I think it is terrible that the party of Abraham Lincoln is now the party of Donald Trump."
Ian Blackford, a Scottish Nationalist who sits on the committee which decided whether a possible ban should be debated, said: "It is unfortunate that Donald Trump thinks he can treat Scotland and the people of this country as a personal play thing."
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