THE United Kingdom Independence party (UKIP) is being investigated over donations totalling £118,000 that apparently disappeared.

The Electoral Commission is looking at why the donations, made by individuals in five instalments, the biggest of which was £50,000, never appeared in any of its four main bank accounts and bypassed UKIP’s treasurer.

The commission was notified of the discrepancy after it was leaked in a letter written by Bruce Lawson, the treasurer, in which he threatened to resign, while warning that the matter could “haunt us for years” and create difficulties with the authorities.

“I joined UKIP because I thought we were different to the other parties but even on the grounds of expediency I will not be associated with this sort of behaviour,” he wrote in the letter, which was sent to Nigel Farage, the party leader, and David Campbell Bannerman, his deputy.

Describing the missing £118,000 as a “very serious situation”, he added: “I fear that my faith in the transparency of party dealings is greatly diminished.”

The money consisted of five cheques: £50,000 and £23,000 from Alan Bown, a bookmaker, whose registered donations total £219,000 over the past three years; £20,000 from Charles Robertson, a private donor; and £15,000 and £10,000 respectively from the UKIP MEPs Roger Knapman and Derek Clark.

The five cheques, donated in March and April 2005, for use in the general election campaign, were declared to the Electoral Commission but did not pass through the party’s main bank accounts. “This £118,000 does not appear to have been entered into the books,” Lawson wrote in the letter, dated October 6 last year. “These five cheques were not banked in any of the four Royal Bank of Scotland accounts . . . I have been badly misled.”

Lawson, whose concerns contributed to the accounts being filed with the commission six months late, said that unless “full disclosure” was made of the secret account he would resign. “The Electoral Commission could quite rightly be very difficult if they knew the full circumstances and they are already pursuing us.”

This weekend, Lawson declined to answer whether he was given access to the account that received the money.

Farage said he could not say whether Lawson had been given access to the account.

“The money was declared but I don’t think the internal bookkeeping on it was as good as it could have been,” he said.

“There had been an account set up for the general election out in the west country and intitially Bruce just could not find where this money was and that was the reason for his letter.

“Bruce refused to submit our accounts to the Electoral Commission until he was 100% sure he could stake his professional reputation on the quality of the accounts.

“He felt the information was not, and I think rightly, up to the sufficient standard, so he made bloody sure that it was before it was submitted.”

The Electoral Commission declined to comment other than to state : “We have written to the party on a number of issues including the late submission of the accounts.”

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