CHRIS HUHNE, the bookies’ favourite to win the Liberal Democrat leadership contest, has been reported to the President of the European Parliament for “fraudulent” use of EU money.

An investigation by Newsnight on BBC Two found that in the two years before his election as MP for Eastleigh, Mr Huhne claimed at least £800 from the information budget of the European Parliament to subsidise four newspapers published by Eastleigh Lib Dems that promoted him as the local candidate. Mr Huhne had been chosen as their candidate in June 2003, having served as an MEP for the South East since 1999.

Edward Kellett-Bowman, the former Tory MEP who made the complaint, said that Mr Huhne was involved in a serious abuse of the rules governing funds that are allocated to promote the European Parliament. “It’s fraudulent use of public funds, and unfair. It was a marginal constituency, Eastleigh, and if the Liberal Democrats were using their money from Europe to electioneer, it was quite clearly wrong,” he said.

Mr Huhne told Newsnight a previous complaint by Mr Kellett-Bowman made in April 2005 about the last of the four newspapers in dispute had been investigated and dismissed.

Mr Huhne denied he had broken the parliament’s rules as none of the newspapers were distributed during the general election last April, but in the run-up to it.

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