UKIP leader Nigel Farage has said he is considering legal action after claims that he pocketed £15,500 per year in expenses for an office on which he pays no rent.
Farage, a member of the European Parliament, faces an investigation into almost £60,000 of "missing" European Union funds that have been paid into his personal bank account.
"I have been accused, on the front page of The Times, of siphoning off money to the Cayman Islands," Farage told BBC Radio 4's Today programme this morning, adding that he would take legal advice.
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"We are seeing yet another politically motivated attack from an establishment newspaper," he added. "The Times are wilfully misleading people into thinking that I have falsely claimed money from Brussels – I haven't."
Transparency reports revealed that the Ukip leader receives the £15,500 payment for the upkeep of his constituency office – a small grain store in the seaside town of Bognor Regis. However, it emerges that the space was given to Farage by supporters in 2009. The Times estimates that utilities and other non-rental costs amount to £3,000, leaving more than £12,000 per year unaccounted for.
Farage told interviewer Justin Webb that the money had been spent "legitimately" and that he was willing to submit to an independent audit.
A Ukip spokesman said that Farage was "confident he has abided by European parliamentary rules at all times when spending allowances".
Transparency reports have been filed only since 2009 so it is possible that Farage may have spent up to £200,000 of EU funds on "office management and running" costs since his election in 1999, The Times says.
"We get an allowance from the EU parliament and we can spend it how we see fit," Farage said. "We are taking exactly the same sums of money as any other British MEPs."
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