UKIP found itself in more hot water yesterday after a leaked European Parliament audit suggested it had misappropriated almost half a million euros from EU coffers in election expenses.

The external audit, obtained by Sky News, said spending on polling in key Ukip target seats in Westminster elections and ahead of the EU referendum broke rules requiring that the money be used for EU business and not in domestic campaigns.

If the EU Bureau upholds its findings at a meeting next Monday, the Alliance for Direct Democracy in Europe (ADDE) could be forced to pay back €150,000.

The ADDE, which includes MEPs from seven countries but has a big Ukip majority, claimed its spending was “fully eligible and compliant to EU regulations” and that, despite being an anti-EU bloc, it would challenge the audit in the European Court of Justice.

The audit report apparently shows that the ADDE bankrolled polling in Britain between February and December last year, including pre-election surveys in Thanet South, where Nigel Farage unsuccessfully stood for Parliament, and a number of other Ukip target seats.

The audit put the ADDE’s total misspend at more than €500,615 (£430,486) with Ukip, being the chief culprits, spending more than €450,000 (£386,961).

The report concluded: “The constituencies selected for many of the polls underline that the polling was 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.”

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