The Brexit party is to launch a formal legal challenge against the result of this month’s Peterborough byelection, where it was narrowly beaten by Labour, claiming that allegations of corruption connected to postal votes need to be investigated.

Nigel Farage, the party’s leader, insisted the challenge was about more than the loss to Labour by 683 votes, saying the wider use of postal votes was open to abuse and needed to be investigated.

“I know people will say: ‘Oh, but it’s sour grapes.’ It isn’t,” Farage told a press conference in London.

“Actually, as far as I’m concerned, this is about a lot more than Peterborough. It is about a system that is wide open to corruption, to intimidation, to bribery, to abuse on a whole number of levels. I have mentioned this a number of times in the past.”

The party plans to issue a petition under the 1983 Representation of the People Act, which allows election results to be challenged retrospectively for reasons including errors or corruption connected to the polling.

Such challenges are rare, with the last successful one coming in 2010, when the Labour minister Phil Woolas was ejected from his Oldham East and Saddleworth constituency after a specially convened election court upheld a complaint that Woolas had knowingly lied about his Lib Dem opponent.

Police investigated five complaints connected to the Peterborough byelection on 6 June, in which Labour’s Lisa Forbes defeated the Brexit party’s Mike Greene in a vote Farage’s new organisation had been tipped to win.

Labour has rejected any wrongdoing, and police have ruled that no offences were committed in three of the five complaints so far looked at.

The Brexit party chair, Richard Tice, conceded that the evidence so far seemed uncertain, but said that was why a full investigation was required.

“You’re absolutely right – there are a lot of rumours, a lot of hearsay, some of which is just that,” Tice said. “There is evidence emerging. That will be presented to the electoral court. It’s wrong to prejudge that, or announce that now.

“It’s only by having a full petition that we can truly get to the bottom of what may or may not have happened here, but also the lessons for the broader system.”

He said there were many unanswered issues: “Why were there rumours that morning that the Labour party had won by 500 votes? There are so many questions. We need answers. And the only mechanism available to us to give us those answers is to lodge a petition under the Representation of the People Act 1983. So we will be doing that this week.”

Both Farage and Tice said they hoped more widely for UK elections to return to the pre-2001 system of voters only being allowed a postal ballot if they can show they are away or ill, rather than on demand. Since then the proportion of general election votes submitted by post has risen from about 2% to 18% in 2017.