THE Kent-based leader of the UK Independence Party has welcomed a court ruling that has lifted the threat of the party becoming bankrupt.

A court has ruled the party did break rules on donations to political parties but says it need only forfeit £18,000 of a donation given by the retired Kent bookmaker Alan Bown, who lives in Thanet.

The Electoral Commission had originally demanded the party hand back £350,000 because Mr Bown was not on the electoral register in Thanet at the time he made the donation.

UKIP appealed and a magistrates court has ruled the breach of the law on donations was accidental and ordered the party to forfeit £18,000 instead.

Nigel Farage, party leader and south east MEP, said: "We have been given a rap on the knuckles rather than the death penalty. We may have broken the letter of the law but not the spirit.

"The Electoral Commission wanted us to forfeit it all which would have seriously weakened our position."

Mr Bown also welcomed the ruling and said he planned to continue giving money to the party. "I am delighted. The court took the view that it was a mistake. I fell off the electoral register for a year in 2004 and then was back on it in 2005. It was a genuine error."

Asked if would continue to support the party, he said: "I will. UKIP is the only party which has the aim of taking us out of the European Union."

The Electoral Commission said it would study the ruling before deciding whether to appeal. The money will be paid to the Exchequer.