The Electoral Commission has reopened an investigation into Vote Leave’s EU referendum spending.
The campaign paid £625,000 to clear bills allegedly run up by university student Darren Grimes with a digital agency days ahead of last June’s vote.
A separate group, Veterans for Britain, received £100,000 from Vote Leave.
The campaign denies attempting to get round spending limits – the Electoral Commission initially accepted this but now says it has new information.
A group of campaigning lawyers, The Good Law Project, has started legal action against the commission over its original decision to drop the investigation, claiming the watchdog was not doing its job properly.
Jo Maugham QC, of the Good Law Project, said: “We are 18 months after the referendum vote. It is extraordinary that only now is the Electoral Commission taking a serious look at whether the rules were complied with. And only in response to legal action.”
He added: “The Electoral Commission has urged us to agree to drop our High Court case. We will consider this question carefully in the coming days.”
A former senior Vote Leave source accused the watchdog of giving in to pressure from the Good Law project – something the watchdog has denied.
“The Electoral Commission is an utter joke,” the source told BBC News.
“They investigated the last time there was a spurious complaint and found Vote Leave followed the rules and donations were within the law.
“Now they’ve given in to peer pressure from a bunch of die-hard Remainers who would rather believe in some vast conspiracy rather than respect the democratic vote of the British people.
“This is in contrast to the Electoral Commission’s repeated failures to call out dodgy Remain behaviour, which exploited the full weight of the government during the campaign. It reeks of double standards.”
The row centres around Darren Grimes, at the time a fashion student at the University of Brighton, who set up a group called BeLeave, to give young pro-Brexit campaigners a voice during last year’s referendum.
As a registered campaigner, he was allowed to spend up to £700,000. He initially spent very little but in the 10 days leading up to the 23 June vote he ran up a £675,315 bill with AggregateIQ Data, a Canadian marketing firm that specialises in political campaigns.
Money to clear the bill was not given to Mr Grimes but sent directly to Aggregate IQ by Vote Leave, which separately spent £2.7m with the same firm, more than a third of its £6.8m budget.
Mr Grimes also received £50,000 from an individual Vote Leave donor in the final 10 days, making the previously obscure campaigner’s group one of the best-funded at the referendum.
Vote Leave Campaign director Dominic Cummings was quoted on AggregateIQ’s website as saying “we couldn’t have done it without them”.
In total, AIQ was given £3.5m by groups campaigning for Brexit, including Vote Leave, the Democratic Unionist Party and Veterans for Britain.
Vote Leave would have gone over its campaign spending limit if it had spent the money it donated on behalf of Mr Grimes itself.
The campaign group said it made the donation to Mr Grimes because it was coming up to its £7m spending limit and wanted a way of using £9.2m it had raised from individuals and companies on campaigning activities.
The Electoral Commission said in March this was an “acceptable method of donating under the rules” and after a “detailed look” at the case it did not find reasonable grounds to suspect an offence had been committed.
The new probe will look at whether the spending returns delivered by Mr Grimes, Veterans for Britain and Vote Leave were correct – and whether or not Vote Leave exceeded its spending limit.
Bob Posner, the Electoral Commission’s director of political finance and regulation, said: “There is significant public interest in being satisfied that the facts are known about Vote Leave’s spending on the campaign, particularly as it was a lead campaigner with a greater spending limit than any other campaigners on the Leave side.
“Legitimate questions over the funding provided to campaigners risks causing harm to voters’ confidence in the referendum and it is therefore right that we investigate.”
In April, the Electoral Commission launched a separate investigation into spending during the referendum by Leave.EU, the campaign backed by then-UKIP leader Nigel Farage and donor Arron Banks.
It is also investigating spending by the anti-Brexit campaign Britain Stronger in Europe.