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The National Crime Agency has revealed it is taking no further action against Brexiteer Arron Banks over claims he broke election law during the EU referendum.

The insurance tycoon and key ally of Nigel Farage was facing investigation by the powerful body over £8m of funding during the 2016 vote.

It probed claims there were "reasonable grounds" to suspect Mr Banks was not the true source of £8m in loans and that he "concealed the true details of these financial transactions".

Also facing investigation were his Brexit campaign Leave.EU, which he founded, its chief executive Elizabeth Bilney and a company called Better for the Country Ltd.

But today the NCA announced it found "no evidence that any criminal offences have been committed" under election or company law "in respect of this specific matter" by any of the four people or groups.

"It will therefore take no further action against Mr Banks, Ms Bilney, Better for the Country Ltd or Leave.EU in respect of this specific matter", the NCA said.

(Image: SWNS)

Mr Banks and the other groups had always protested their innocence after the matter was referred to criminal investigators by the Electoral Commission.

Today the Commission defended its decision - saying there was an apparent "weakness in law" that meant foreign money could legally be used in UK politics.

An Electoral Commission spokesperson said: “We are concerned about the apparent weakness in the law, highlighted by this investigation outcome, which allows overseas funds into UK politics.

"We have made recommendations that would tighten the rules on campaign funding and deter breaches.

"We urge the UK’s governments to act on those recommendations to support voter confidence.

(Image: Getty Images)

“Significant sums were spent on campaigning at the 2016 EU referendum and it is vital that voters have transparency over the way these campaigns were funded.

"It is therefore right that suspected offences are investigated by the appropriate authorities, as the NCA has done in this case.”

The NCA studied bank records and interviewed Mr Banks and Ms Bilney in the 10-month probe, which focused on £8m in loans provided to Better for the Country Ltd and Leave.EU.

The Electoral Commission believed the money may have been "impermissable" under election law, a definition which can include cash coming from abroad.

Today the NCA said Mr Banks did take a loan from Rock Holdings Ltd, an Isle of Man-based company of which he is the ultimate beneficial owner.

But the NCA said he was "legally entitled to do so".

(Image: Leon Neal)

The NCA also said he was "legally entitled, in his capacity as an individual, to release these funds to Better for the Country Ltd" by instructing Rock Services to make the transactions.

The NCA concluded: "Rock Holdings Ltd was not involved in these transactions in a manner which contravened the Political Parties, Elections and Referendums Act."

Investigators said they received no evidence to suggest Mr Banks received funding for the loans from a third party.

Controversial insurance tycoon Mr Banks is an ally of Nigel Farage who donated £100,000 to UKIP in 2014.

(Image: Getty)

His Leave.EU group lost out to Vote Leave in a race to be the official Brexit campaign in 2016.

It ran a hard-hitting campaign which deliberately focused on immigration to "set the wildfires burning", Mr Banks has said.

Mr Banks said today: "For nearly a year, I have been subjected to an endless media campaign suggesting that I behaved improperly during the 2016 referendum campaign.

"This is all because the Electoral Commission, having found no impropriety, forwarded my file to the NCA.

"They made false, outrageous allegations that I was not the true source of funds during that campaign and that 'a number of criminal offences may have been committed.'

"Several prominent media organisations have sought to declare the referendum result invalid, suggested that Russia was the source of the money and caused serious damage to the reputations of Liz Bilney and myself.

"No wrongdoing of any kind has been found and I intend to take action against those who have behaved so scandalously."

The agency also made clear: "There have also been media reports alleging that Mr Banks has been involved in other criminality related to business dealings overseas.

"The NCA neither confirms nor denies that it is investigating these reports."