In May 1941, during the Second World War, Donaldson's home was raided by the police, who suspected him and a number of other SNP figures of "subversive activities", due to their support for the Scottish Neutrality League. An informant of MI5 told the desk officer Richard Brooman-White that in the event of a Nazi invasion of Britain Donaldson intended to set up a puppet government akin to that of Vidkun Quisling. As a result of this information, Donaldson was arrested and interned under Defence Regulation 18B, sent first to Kilmarnock Prison and then to Barlinnie Prison in Glasgow. He was held for six weeks. No evidence was ever produced and Donaldson was never charged.