Pauline Hanson’s One Nation is at risk of breaching electoral laws by using a structure that runs state branches by “remote control” from Queensland, according to an explosive letter that reveals growing pressure inside the troubled party.

The concerns add to accusations of a “dictatorship” being run by Senator Hanson, as billionaire former MP Clive Palmer exploits the One Nation divisions in a new grab for power on the Senate crossbench.

Fairfax Media can reveal One Nation wrote to the NSW Electoral Commission 10 days ago to admit doubts over the registration of the party branch in NSW because it did not have local balance sheets and reports to satisfy state disclosure laws.

“It was clear from our meeting on 22 May 2018 that operating the party by remote control from Queensland may be in breach of the NSW funding and disclosure laws,” wrote Peter Breen, the secretary of the party’s state division.