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Last Updated: Friday, 23 February 2007, 10:51 GMT
Legal bid 'may leave UKIP broke'
UKIP leader Nigel Farage
Nigel Farage fears his party could be put out of business

The UK Independence Party (UKIP) says a bid to force it to forfeit 367,697 of "impermissible" donations could leave it "penniless".

The Electoral Commission has accused the party of breaking the law by accepting money from a donor whose name was not on the electoral register.

UKIP, which has 10 MEPs, said legal action was disproportionate for what it claims was an honest mistake.

Its leader, Nigel Farage, said it could put the party out of business.

The Electoral Commission's allegations centre on donations to UKIP by retired bookmaker Alan Bown, who it claims was not properly registered.

The cash would be paid into government coffers rather than being returned to Mr Bown.

'Simple error'

But UKIP says it will fight the Electoral Commission in court, arguing the breach of rules had been the result of a clerical error.

Mr Farage said his party was being unfairly victimised by the Commission, at a time when larger parties, such as Labour and the Lib Dems, were under investigation for more serious breaches of the rules on donations.

"They have come down like a ton of bricks on the only party that receives no state funding whatsoever," he told the BBC.

He said UKIP had no debts but added "we don't have a third of a million to hand right at this moment in time.

"And I have to say this piece of legislation was brought in to stop dodgy foreign donations influencing British politics.

"It was surely never intended that it should penalise us and penalise a man who's lived in the UK all his life, and because of a simple clerical error wasn't on it [the electoral register] in 2005.

"And it feels to us like there's an attempt here by the establishment to close us down."

'Impermissible'

Mr Bown has donated more than a million pounds to UKIP in recent years.

Earlier, the party said its accounting systems were reviewed twice a year to ensure they complied with legal requirements.

The 2000 Political Parties, Elections and Referendums Act forbids taking money from certain "impermissible donors," normally people or organisations not registered in the UK.

Parties have up to 30 days from the date the donation was received to return the money to the donor.

The Electoral Commission says UKIP is also facing a 1,500 fine for filing its accounts late.

It also said it was launching a review of UKIP's "systems for dealing with its financial affairs and meeting statutory reporting requirements".

Name change

UKIP was formed in 1993 to campaign for Britain's exit from the European Union.

Since taking over as leader last year, Nigel Farage has attempted to broaden its appeal to attract Conservatives disaffected with David Cameron's leadership.

It is expected to change its name to the Independence Party ahead of May's local elections, when it will campaign on a wide range of policies.

Last month two Tory peers, Lord Pearson of Rannoch and Lord Willoughby de Broke, defected to UKIP, giving the party its first representation at Westminster.

Lord Pearson, who has raised funds for the Conservatives, urged Tory donors to switch sides as UKIP "needs the money".

The Electoral Commission is also preparing to take legal action against the Socialist Labour Party over 5,090 of donations.


SEE ALSO
UKIP leader 'offered Tory seat'
05 Dec 06 |  UK Politics
Former Hague aide defects to UKIP
08 Dec 06 |  UK Politics
Profile: Nigel Farage
12 Sep 06 |  UK Politics
UKIP needs to broaden appeal
12 Sep 06 |  UK Politics
Farage elected new UKIP leader
12 Sep 06 |  UK Politics
Profile: UK Independence Party
28 Jul 06 |  UK Politics

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