BNP's accounts to be investigated by watchdog

The British National Party's campaign suffered a fresh blow last night after the electoral watchdog announced an investigation into its accounts.

The BNP has already been fined £1,000 by the Electoral Commission for filing its 2008 financial records nearly six months late and been told to provide more information about its income. After beginning a case review into the accounts three months ago, the commission has now moved on to the next stage, which is a formal investigation.

The independent auditor of the far-right party's accounts for 2008 said the records did not provide "a true and fair view" of its finances.

The commission said yesterday: "It is important to note – particularly during an election period – that no conclusion has been reached and therefore no assumption should be made as to whether a breach of the rules has occurred."

The accounts showed the BNP lost more than £80,000 in 2008, despite a leap in its income from donations to more than £660,000. Spending soared from £662,000 over the year to £1.1m.

The BNP's preparations for next month's general election have been chequered. Nick Griffin, the party leader, called a meeting of senior officials after it emerged that the BNP's publicity director had been arrested on suspicion of threatening to kill him. Mark Collett has been accused by party chiefs of planning a "palace coup" against the leader.

The BNP says it has selected more than 330 general election candidates.