The leader of the Vote Leave campaign has repaid a £50,000 charitable grant after he was found to have used the money to produce a highly political 1,000-page anti-EU dossier.

Matthew Elliott, chief executive of the official pro-Brexit campaign in last June’s referendum, used a grant from a charity he had set up to fund a high-profile campaign report called Change or Go – How Britain Would Gain Influence and Prosper Outside an Unreformed EU.

The repayment follows concerns raised with the Charity Commission that the Politics and Economics Research Trust (PERT), set up by Elliott in 2006, should not be supporting groups to undertake research that takes a political position on a contested topic like EU membership.

PERT is constituted as an educational charity and it benefits from tax relief on donations. Over the past five years it has given most of its grants – more than £2m – to anti-EU campaign groups run by Elliott including Business for Britain, which published Change or Go, and the TaxPayers’ Alliance. Elliot stepped down as secretary of PERT in 2010.

Its trustees have included several leading Eurosceptics including the retail millionaire and Labour donor John Mills, the Conservative party donor Patrick Barbour and the former Ukip leader Lord Pearson. Its financial backers are not made public.

In a report into the case published on Thursday the Charity Commission said it had uncovered matters of “regulatory concern” at PERT. It said: “Charities with objects to further education cannot promote a political or predetermined point of view.”

The Charity Commission asked to review research funded by PERT after the Labour MP Emma Reynolds complained the charity “has been engaging in day-to-day political activity”. She asked the regulator to “confirm whether its conduct is in contravention of the law”.

The Charity Commission found PERT “did not have processes to monitor research projects the charity had funded” and that this “was a regulatory concern, as the trustees could not be certain that its funding was being used solely to further its objects”.

Change or Go was published in June 2015, before David Cameron’s attempts to renegotiate UK membership of the EU. It argued that “leaving would not entail a loss of British influence on the world stage”.

The research formed the basis of a front-page news report in the pro-Brexit Daily Telegraph but PERT did not appear to have any concerns that its grant was not being used in line with its educational objectives until several months later.

“It was only following our request to review the research reports funded by the charity in December 2015 that the trustees reviewed this report and asked for the funding to be returned,” the commission said.

PERT’s latest annual report states the money was repaid in 2016 “after mutual agreement that the project has materially altered in the course of its execution”.

Elliott said: “When the Research Trust requested in early 2016 that Business for Britain return their contribution towards the publication, we did so voluntarily because the referendum was imminent. When returning the grant, we made it clear that we stood by the publication as being a solid and balanced piece of research, and this was acknowledged by the Research Trust.”

A previous Charity Commission inquiry into PERT in 2011 warned its reputation risked being damaged if it did not properly manage its relationship with another of Elliott’s campaign groups, the TaxPayers’ Alliance.