Nigel Farage has “effectively handed” seats such as Hartlepool to Labour with his pledge to contest every seat and potentially split the leave vote in December’s election, the chairman of the town’s Conservative party has said.

Ray Martin-Wells said the two pro-Brexit parties would “take each other out” and relinquish a once in a generation chance to remove Labour MPs in their north-east heartland. The former councillor said he was “surprised and disappointed that [Farage] will effectively hand seats to Labour who clearly don’t want to support Brexit”.

He added: “I think if we had a clear run at it we’d have a strong chance – Boris is a straight-talker which goes down very well in Hartlepool – but if the Brexit party stand we will just take each other out.”

Labour is facing its greatest challenge in decades to retain seats like Hartlepool amid rising anger about Brexit and an ascendant Brexit party, which took over the borough council in September and has been canvassing voters since summer.

Hartlepool voted 69.3% for leave in the referendum – the highest in the region – and there is little sign that opinion has softened. Many believe that Hartlepool is Farage’s best chance of winning a seat at Westminster and, according to estimates by the academic Chris Hanretty, the town returned a higher Brexit party vote than any Labour seat in May’s European parliamentary elections.

Shane Moore, the town’s Brexit party leader, believes his party will end Labour’s 56-year stranglehold on Hartlepool in December, whether the Conservative party field a candidate or not. “The sentiment we have from the general public and the fact Labour have finally got off the fence and said we’re campaigning for a second referendum – that’s just helped us in Hartlepool,” he said.

The 11-month-old Brexit party took charge of its first full council meeting anywhere in the country on Thursday night, having taken joint-control of Hartlepool council with the Conservatives in September following the defection of a number of ex-Ukip and independent councillors. Labour lost control of the council in May, along with neighbouring Darlington, Middlesbrough, Stockton and Redcar and Cleveland councils as it was punished at the polls for its prevarication on Brexit.

In Hartlepool, the club’s former football chairman, Ken Hodcroft, has been announced as the Brexit party candidate and activists have been hitting the doorsteps since August. The Tories, meanwhile, are yet to get out of the blocks. The party locally has chosen its favoured candidate – understood to be Ralph Ward-Jackson, a friend of David Cameron and descendant of the 19th-century founder of West Hartlepool – but his candidacy has not yet been approved by Conservative party central office.

On Hartlepool’s poorest estate, Dyke House, people are queuing up to kick the establishment, said Sacha Bedding, the manager of a pioneering community centre in the neighbourhood. “There’s a level of anger in this community about not leaving the EU and the duplicitous nature of the politicians stopping that happening. It’s tangible,” he said, adding that Brexit party activists were getting a “great response on the doors”.

About 2,000 people a year use Bedding’s centre, the Annexe, either for emergency food parcels or for help finding a job. The town’s challenges are stark: as many as 8,000 children in Hartlepool – 38% of that age group – are living in poverty after housing costs; the number of unemployment benefits is double the national average; weekly pay is £60 less than the UK average; life expectancy is actually falling in the town.

Locally and nationally, Labour’s strategy is to highlight these issues and steer the focus from Brexit. “The message we’re taking to the public is you have a choice: who do you trust with your public services? This election is about a lot more than just Brexit,” said Jonathan Brash, a local Labour party activist.

Labour has been beset by infighting locally, with its long-serving leader Christopher Akers-Belcher quitting the party after what he described as “racism, bullying, harassment and anti-semitism” in the party (Brash said Labour “could not be stronger” following Akers-Belcher’s departure).

“I think the Labour party will just be annihilated,” said Akers-Belcher, who ran the council for six years until May. He has since joined the Socialist Labour party group and will be campaigning for its candidate in the election.

“They are absolutely snookered. It will go to the Brexit party. What Labour are going for is just another referendum and I honestly think if there was another vote in Hartlepool the leave vote would be even higher. People just want a clean break.”