BNP at war amid allegations of illegal activity

· Around 50 key members quit to set up rival faction
· Leadership claims affair will quickly blow over

Taking stock in the library of the Oxford Union Nick Griffin had good reason to be cheerful. The chairman of the British National party, who scored a resounding victory in a summer leadership challenge, had just given a confident performance in front of some of the brightest students in the country and was looking forward to the next day's headlines.

Three weeks later, however, and the political landscape on the far right has changed. The BNP is engulfed in a bitter factional war which threatens to tear the organisation apart.

This week the leadership was accused of spying, theft and money laundering and dozens of key organisers have resigned the party whip and are now calling themselves the "Real BNP".

Labour MP Jon Cruddas has handed a dossier of evidence to the Electoral Commission and the Metropolitan police that he says contains evidence of "alleged illegal activity and financial irregularities".

Cruddas, who has several BNP councillors in his Barking constituency, told MPs in the House of Commons: "What's been uncovered in the internal workings of the BNP appears to be systematic illegality in terms of data protection, bugging, money laundering, theft and the operation of the Political Parties Elections and Referendums Act 2000."

Detectives in Nottinghamshire have confirmed they are investigating claims that a BNP security team stole files and computer equipment from the home of a regional official. The Metropolitan Police said it had responded to the allegations but added it was not investigating the matter "at the current time."

The BNP insists it has not done anything illegal and says the affair will "blow over" by Christmas.

"This is not a split so much as a slither and it will all be sorted out very quickly indeed," said the BNP's national spokesman, Simon Derby.

The allegations come at the end of a tumultuous week. Tensions between modernisers and hardliners boiled over on Monday when it emerged that about 50 councillors and organisers had resigned and declared themselves to be the "Real BNP". That was followed by showdown meetings between Griffin and the rebels.

At one, in the Gun and Dog pub in Leeds on Tuesday, a witness described how the meeting descended into chaos when one of the rebels smashed a glass and threatened to attack Griffin supporter Mark Collett.

Despite the protestations of the leadership the BNP appears to have lost the support of the Yorkshire region - widely seen as one of the party's heartlands - as well as key organisers in other areas. Anti-fascist campaigners say this is the most serious crisis the BNP has faced since it was formed in the early 1990s.

"In the past disputes have been between the old guard and Griffin, who portrayed himself as a moderniser taking the party forward," said Nick Lowles, from anti-fascist organisation Searchlight. "Now, however, many of the younger more able organisers and activists who make the party tick on a day-to-day basis are breaking away and that is what makes this much more serious for the leadership."

The original row centred around two organisers, Sadie Graham and Kenny Smith, who were accused of plotting an "inept and ill-timed coup" against Griffin, Collett and another senior finance official, Dave Hannam, last week.

Graham, a BNP councillor in Broxtowe in the east Midlands and the BNP's group development officer, claims the party secretly bugged her home. She said a BNP security team "tricked" their way into her house when she was out, taking files and computer equipment.

The party's website ran a recording of a conversation between Graham and Smith, who were subsequently sacked for "gross misconduct". The BNP has insisted Graham's home was not bugged, but rather that she had accidentally dialled a number on her mobile phone that led to the conversation being recorded. And they insist that they have proof that the equipment taken belonged to the party.

The rebels cast themselves as modernisers, frustrated at the way the party's finances are run and its failure to confront unsuitable members. They have set up a "Real BNP" faction which appears to have the support of up to 60 senior members.

The split comes at a crucial time for the BNP, which is hoping to make a breakthrough in next year's London assembly elections. In the Commons this week Cruddas said the party was "engulfed in a political crisis" that threatened to tear it apart. "This is not the behaviour of a legitimate political party and I hope to see the police and the Electoral Commission investigate these charges," he added.

The Guardian