THE UK Independence party deliberately covered up the fact that one of its MEPs embezzled tens of thousands of pounds of taxpayers’ money by pretending to be someone else.

An internal inquiry into the practices of Tom Wise, its MEP for the east of England, was silenced after the former senior policeman running it found evidence of serious wrongdoing.

News of the inquiry’s suppression comes after The Sunday Times reported last week that Wise had siphoned nearly £40,000 of public funds into his own account by telling the European Union it was being paid direct to Lindsay Jenkins, his researcher. In fact Wise had swapped his bank details for hers to ensure the money went to him instead.

Last week, Wise, who is now being investigated by Olaf, the EU’s antifraud office, had the whip removed by his party after he admitted he had used £6,500 of the money to buy a car.

The party’s decision led to a split in its MEPs. Several threatened to resign if Wise was not suspended while others, including Roger Knapman, its former leader, indicated they may walk away from UKIP for “abandoning” him to his fate.

The green Peugeot 406, which Wise still drives, was bought in January 2005. He is refusing to tell party chiefs how he spent another £13,000 of the embezzled money.

The party has frequently accused the EU of being rife with corruption and criticised other parties’ MEPs for enjoying the “gravy train”. But last year it ordered an internal inquiry into Wise after the European parliament became aware he was claiming £36,000 a year for Jenkins, whom he had arranged to pay a salary of just £500 a month.

To avoid fraud, EU rules state that assistants’ salaries, which can be claimed through MEPs’ allowances, must be paid direct to the researcher or via a party “agent”. Instead, Wise had channelled the money into his own account by pretending on the form for the EU payments office that it belonged to Jenkins.

But the internal inquiry into the matter was stopped by Knapman, the then leader, before it could report fully to UKIP’s national executive committee.

It is understood that one of the report’s authors, Trevor Colman, a former police superintendent, was “very disappointed” that Knapman failed to act on his findings.

Nigel Farage, the party’s current leader, said this weekend: “The report we had on Wise last year went so far and effectively didn’t go any further.

“I feel we didn’t deal thoroughly enough with this at the time. It was something I always thought was going to come back. We did not have full disclosure. We didn’t have it at any stage.”

Another source said: “It’s a total bloody mess, to be honest. Roger said last year that the EU parliament had cleared Tom but that is not the case, since they just handed the matter to Olaf.

“Until Friday morning no one knew that there was an Olaf investigation. Nigel absolutely reeled. We didn’t know about the car Tom had bought. That changed everyone’s opinion overnight.

“We say the European audit office is losing £2m a day through fraud, we are trumpeting that all over the place saying ‘isn’t this shocking’, and to find one of your own doing it, how bad do you think that makes us feel?”

Godfrey Bloom, a party MEP, said he had threatened to resign unless Wise was suspended after hearing he had bought a car with some of the embezzled funds.

“We are not the same as other parties who let these things go on and on and I don’t want to be part of that sort of thing. I am very angry,” he said.

Knapman declined to comment. Before suspension, Wise had threatened to expose matters he felt UKIP would rather not have scrutinised. A party source said: “The impression given out is that some within UKIP don’t want to antagonise Wise too much in case he decides to accuse other party bigwigs of doing things they shouldn’t have.”

It has also emerged that for nearly a year Farage has been employing his German wife Kirsten as his personal assistant. She is paid £2,200 a month to act as Farage’s secretary from their home in Kent.

Farage, who employs three other staff with his EU allowance, said his wife had replaced a personal assistant. “I need significant secretarial help at home,” he said.

Times Recommends

• Sarah Brown and the ladies who tweet
• Open letter to a hero's daughters, from the daughter of a murdered officer
• Transplant drug extends life in mice