Momentum, the group behind the leftwing takeover of the Labour party, is facing fines and a possible criminal investigation over whether it breached spending limits during the general election.

The electoral watchdog is investigating Momentum after it claims to have spent just £39,000 on the campaign despite raising £580,000 from its members during the year.

Momentum has been largely credited by MPs and supporters of leader Jeremy Corbyn with mobilising grassroots backing for Labour which led to the party exceeding expectations in June’s snap election.

Thousands of volunteers were deployed by Momentum across the country to campaign for local Labour candidates in dozens of marginal seats ahead of polling day.

In one case Labour MP Chris Williamson told The Guardian newspaper a fortnight after election day that “I owe a debt if gratitude to Momentum” and “it was Momentum that helped Labour win back Derby North”.

The group’s social media strategy – including videos released online – also reached millions of voters and was said to have persuaded millions of young people to vote Labour for the first time.

Spending for Momentum as a non-party campaigning organisation is limited to £31,980 in England, £3,540 in Scotland, £2,400 in Wales and £1,080 in Northern Ireland for the regulated period, which in this year's case stretched for 12 months before the June 8 ballot.