Nigel Farage denies Ukip misspent almost £400,000 of EU money on Brexit campaign and general election

'I've understood absolutely the rules. This is pure victimisation'

Nigel Farage has denied Ukip misspent almost £400,000 of EU funding on trying to win the Brexit vote and get members elected as MPs.

A leaked Brussels audit found the party broke spending rules by diverting taxpayer money to its own polling ahead of the EU referendum and in key constituencies for the 2015 general election.

EU money is only meant to be spent on activities at a European level and domestic financing is banned.

Speaking to Sky News, Mr Farage said: "We've been expecting this for years. We are in an environment where rules are wilfully interpreted as suits.

"I've understood absolutely the rules. This is pure victimisation. I am the most investigated MEP in history. Look at what the pro-EU groups were spending."

If the audit conclusions are confirmed next week, an already cash-strapped Ukip could be forced to pay back a huge sum, while future funding would be stopped.

The news comes at the worst possible time for the party, which recently left its London headquarters and faces losing the funding of its key donor, Arron Banks.

The audit, obtained by Sky News, focused on money handed to the Ukip-dominated Alliance for Direct Democracy in Europe.

It concluded the ADDE had used the money for “indirect financing of a national political party” and “a referendum campaign” by conducting polling in the UK.

According to Sky, the report finished: “The constituencies selected for many of the polls underline that the polling were conducted in the interest of Ukip.

“Most of the constituencies can be identified as being essential for reaching a significant representation in the House of Commons from the 2015 General Election or for a positive result for the ‘Leave campaign’.”

On the EU referendum, the auditors said: “Several polling can be considered as financing of a referendum campaign which violates 8(4) ... prohibiting the financing of referenda campaigns.”

The audit put the total misspend at more than €500,615.55 (£430,486.82) by ADDE, which does include other parties in Europe.

However, the “lion's share” was by Ukip, amounting to over €450,000 (£386,961), said an EU spokesperson.

If the bureau agrees with the conclusion of the external audit on Monday, Ukip could be forced to pay back more than €170,000 (£146,185).

The money was used to fund polling in Ukip target seats Great Grimsby and Thurrock, Rochester and Strood and Cardiff South and Penarth at the last election, according to the audit.

Polling was also paid for ahead of the election in Thanet South, where Mr Farage unsuccessfully ran to become an MP.

It continued after the election to fund several EU referendum attitude polls across the country.

Ukip was said to be furious the audit was leaked to the media before it had a chance to see it, suggesting it was leaked by the European Parliament itself.