An MEP from the United Kingdom Independence Party (UKIP) who embezzled tens of thousands of pounds of taxpayers’ money by pretending to be someone else used some of the cash to buy a new car.

Tom Wise spent £6,500 on a dark green Peugeot 406 saloon after siphoning EU money intended to fund the salary of his researcher, Lindsay Jenkins, into his own bank account.

The W-registration diesel vehicle is still owned by Wise, who has represented the eastern region of England for UKIP since 2004.

At a meeting of the party’s MEPs on Wednesday morning, prompted by revelations in last weekend’s Sunday Times about Wise's embezzlement, he admitted he had used some of the money to buy the car, contradicting previous UKIP statements that the cash had not benefited Wise personally.

The party has now withdrawn the whip from him pending the outcome of an investigation by the anti-fraud European Commission watchdog OLAF. The move has prompted a schism within the ranks of UKIP, however, with three of its nine remaining MEPs threatening to break away from the party.

All MEPs are entitled to claim up to £125,000 a year in allowances from the EU for assistants’ salaries but the money must be paid to either a third-party “agent” or direct to the assistant. In order to avoid fraud the money must not be paid to the MEP.

Wise, however, successfully channelled £39,100 of taxpayers’ money into his own account with the Co-operative Bank by submitting a form to the EU payments office in which Jenkins apparently stipulated that she wanted her money to be paid into an account with the name of “Stags”.

In fact, the full name of the account was “Tom Wise trading as Stags” and it was run by the MEP.

The payments office was told by Wise that Jenkins’s salary was £36,000-a-year but his actual agreement with her was to pay her only £6,000 a year for general research work with any additional projects to be paid for separately.

In fact, bank statements obtained by The Sunday Times show that over a period of 13 months she was paid a total of £13,555, while £3,000 was paid into Wise’s account from the EU on the 11th day of each month. The EU payments were the only money coming into the account for more than a year.

Over the same period Wise paid out a further £19,425 from the account to other recipients, including himself. One payment, made on January 4, 2005, was made from his Stags account to another Co-op account also held in his name. This money was then used to buy the Peugeot. Other payments, including several four-figure sums, were also made.

In a further breach of EU rules, some of the money paid to Jenkins was for work unconnected to Wise.

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