Nigel Farage has been condemned for getting in to bed with a party led by Holocaust denier in a move which risks Ukip's credibility.

The Board of Deputies of British Jews voiced "grave concerns" at Robert Iwaszkiewicz's admission by Farage in to Ukip's Europe of Freedom and Direct Democracy grouping, in the EU parliament.

Robert Jaroslaw Iwaszkiewicz is a member of Poland's Congress of the New Right (KNP), whose leader has said women are too stupid to vote and doubts that Hitler knew of the Holocaust. His move makes up for the defection of a Latvian lawmaker last week that had triggered the formal dissolution of the Eurosceptic bloc.

The revival of the group gives it access to extra funding and the right to influential posts within the parliament.

The move has stoked outrage because of the KNP's controversial lineage. Party founder Janusz Korwin-Mikke was fined last month for using racist language during a debate and whose comments on women and the Holocaust have long caused outrage.

Iwaszkiewicz is also no stranger to controversy. He told a newspaper in May that wife-beating could be useful.

Defending the move, Farage said the Polish MEP had been "joking" and denied he was "extremist." The Ukip leader added the nature of the EU parliamentary system made awkward partnerships unavoidable.

Ukip is riding high in UK polls ahead of a crunch by-election looming in Rochester and Strood, but letting in Iwaszkiewicz deals a blow to Farage's credibility, the Board of Deputies said.

"We hope and we believe that people vote for Ukip do so in good faith and that the party carefully considers how it uses its position in the EU parliament," spokesman James Martin said.

Right thinking people would be very concerned by this. Holocaust denial is appalling and it is spreading throughout Europe. It can never be overstated how much of a problem this is. In an EU which is moving to the right, this is a big concern."

Ukip has defended its partnership with the far-right MEP on the grounds it was vital for securing funding for the EFDD. This explanation drew angry condemnation from the Jewish leaders.

Board Vice President Jonathan Arkush said: "For UKIP to choose such a figure as Robert Iwaszkiewicz as a bedfellow, apparently for money, is beyond belief. Nigel Farage now has some very serious questions to answer. He has placed in issue the credibility of UKIP."