Conservative Party under investigation over spending on South Thanet election campaign against Nigel Farage

The Ukip leader was beaten by the Conservative candidate, Craig Mackinlay, in May

The new Conservative MP Craig Mackinlay (right) after winning the South Thanet seat, beside defeated rivals Nigel Farage and the comedian Al Murray (AP)

The Conservative Party is being investigated over allegations it broke electoral spending rules while fighting to prevent Nigel Farage from winning his first Parliamentary seat.

The Electoral Commission launched a probe following a Channel 4 News report that hotel bills were allegedly not included in local spending declarations for the 2015 campaign.

It revolves around the question of whether the cost of stays in the South Thanet constituency, which the Ukip leader unsuccessfully contested, qualified as national campaign spending.

Limits are enforced on both national and local campaign spending, with restrictions for each candidate in each constituency aiming to level the field.

Kent Police has dropped an investigation into claims surrounding an individual Tory candidate’s spending but said the Electoral Commission’s probe continues.

“Kent Police officers will liaise closely with the Electoral Commission and investigate if appropriate,” a spokesperson said.

Mr Farage’s battle for South Thanet was considered one of the most significant in last May’s general election and his confidence in the run-up to the vote was echoed by some analysts, who cited significant grassroots support for his Eurosceptic party in the area.

But Conservative candidate Craig Mackinlay won the seat by 18,838 votes to the Ukip leader’s 16,026, followed by Labour and the Greens.

Following his defeat, Mr Farage briefly quit as Ukip leader but returned shortly afterwards when the party “rejected his resignation”.

While the Electoral Commission has no powers to investigate or sanction alleged candidate spending offences, it does have powers to hand out fines of up to £20,000 in relation to national campaign spending.

"The Electoral Commission has today announced that it has opened an investigation into allegations regarding the Conservative Party spending return at the 2015 UK parliamentary general election,” a spokesperson said.

It will specifically consider whether stays at the Royal Harbour Hotel in Ramsgate and the Premier Inn in Margate, should have been included in national campaign spending or not.

The combined bills totalled £14,213.18, Channel 4 News reported, saying the local expense limit for Thanet South was little over £15,000.

A spokesperson for the Conservative Party said: “All spending has been correctly recorded in accordance with the law.”

Additional reporting by PA