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Tower Hamlets mayor Lutfur Rahman and his supporters “smeared” a Labour rival as a “racist” in during an election battle, it was claimed today.

John Biggs, the defeated Labour candidate for directly-elected mayor, made the accusation at the High Court in London on the second day of a rare trial over alleged electoral fraud.

Mr Rahman is accused of winning last year’s ballot through “intimidation and corruption”. He denies the claim, calling it cynical and politically motivated.

Today the court heard Mr Biggs was allegedly branded racist for “campaigning against the creation of Banglatown” — the renaming of a local council ward in the east London borough. In a written statement, Mr Biggs said he was also compared with British Union of Fascists founder Oswald Mosley.

Mr Rahman, Britain’s first elected Muslim mayor, ran as an independent and beat Mr Biggs. But he is accused of orchestrating a “den of iniquity” and “subverting democracy” in order to be re-elected.

Residents Andrew Erlam, Debbie Simone, Azmal Hussein and Angela Moffat are petitioning for the election to be re-run and have gathered testimonies from 100 witnesses to bring the claim. It is alleged, “ghost voters” were created, media outlets were “bribed” with grants, and voters were intimidated or harassed into supporting Mr Rahman, with Muslim voters told it was “un-Islamic” not to support him.

Today Mr Biggs said he did not believe Mr Rahman was an “extremist” and had no problems with him personally.

But he affirmed his statement which alleged: “unfounded allegations made during and in the run-up to the recent election campaign, by Lutfur Rahman and various of his supporters including his election agent Alibor Choudhury, that I was a racist.

“These statements were deliberately made, in the knowledge that they were false, in order to polarise opinion and to attempt to influence the election result. The closeness of the result indicates that there is a high probability that they had this effect. The intention of these unfounded attacks was to divert voters from supporting me.” He claims some attacks breached election protocol. A number were referred to Scotland Yard.

Mr Rahman topped the poll in the first round of the election, with 43 per cent, and Mr Biggs was second on 33 per cent. In the run-off round he won beat the Labour candidate by 52.7 per cent to 47.7 per cent. Mr Rahman, 49, won the 2010 mayoral election as an independent after being “kicked out” by the Labour Party.

He denies all the allegations. The hearing continues.