Ukip leader says he makes legitimate use of flat-rate allowances after it emerged that he pays no rent on his UK office

A defiant Nigel Farage has rejected "outrageous" claims that he misused taxpayer cash from the European Union and argued that MEPs have a free rein to use around £3,500 a month "as we see fit".

The Ukip leader, an MEP for South East England, said he had spent his European parliamentary allowances on furthering the cause of leaving the EU and not used it for personal gain like buying a house, car or vintage wine with the money.

Controversy about Farage's expenses blew up after the Times claimed he had received an estimated £60,000 more in EU allowances for running an office than he paid in costs for the rent-free property in Lyminster, near Bognor Regis, between July 2009 and December 2013.

Reports published on his website show an average of £1,300 a month in allowances went towards "office management and running" during that period. But in its Tuesday edition the newspaper quoted David Samuel-Camps, a former manager of the office, as saying utilities, business rates and insurance came to only £250 a month.

Subsequently Samuel-Camps, in a letter published by Ukip, said he had been misquoted and the actual figure for office costs was higher, with overall costs of around £700 per month – although even in this case, the figure is still below the average of £1,300 month that Farage's own records said he had drawn from EU funds under the heading of "office management and running".

Farage said the level of the office costs was more like £1,000 a month and argued it was justified as electricity bills for the property were high because of "banks of computers" being run.

The Ukip leader also argued that MEPs were not claiming expenses but were given flat-rate amounts by the EU to use at their discretion, so there was no requirement for the allowances to be used for a specific purpose or receipts to be provided.

Farage also said he was a "turkey voting for Christmas" because he wanted the whole system of EU expenses and allowances to be scrapped and Britain to withdraw. He also offered to have his finances audited if it would settle the matter.

EU funds must be used for the member to carry out his or her duties as an MEP, but Farage said he considered part of his job to campaign against the UK's membership of the EU.

He told the BBC: "I haven't bought a house, I haven't bought a car, I haven't bought vintage wine. I haven't done any of these things – I've used it to keep me on the road as the most active British MEP there has been in the United Kingdom over the course of the last 15 years. I have travelled more miles, I have spoken at more meetings, I have met more people than any other British MEP."

Drawing a distinction between his conduct and that of MPs in the expenses scandal, he added: "I haven't claimed for a taxpayer-funded mortgage, I haven't claimed for horse manure, I haven't claimed for a duck house. "

However, the Electoral Commission said it would be writing to him to find out whether he should have declared the arrangement for rent-free office accommodation as a benefit-in-kind. "We're going to write to him and basically ask for clarifiation around whether it's a donation that needs to be reported," a spokesman for the commission said.

MEPs earn a salary of £79,000 a year, about £250 per day every time they turn up to the European parliament. Their office allowances are around £42,600 a year, although some MEPs, such as the Green party's Keith Taylor, publish all receipts and return any unused cash at the end of the year.

MEPs also get staff allowances of almost £200,000 per year paid through an independent agent, which some use to employ family members. Farage himself employs his wife, Kirsten, on a salary of up to £20,000 a year. A complaint about the office costs has also been submitted to Olaf, the EU's expenses and allowances watchdog, but a spokesman for the organisation said it could not comment on whether there would be an inquiry into Farage.

Ukip's response to the furore also included a direct attack on the Times, saying the article was part of a series of politically motivated stories. Farage also said he was taking legal advice and the party website published a critical list of some of the newspaper's journalists involved in the story and others who simply work at the newspaper. "Perhaps it will not surprise you to know that most have family or personal connections to the Conservative party and that the majority are from immensely privileged backgrounds that have enabled them to prosper as part of the 'chumocracy' run by David Cameron," the party claimed.

Some of its criticisms were that the journalists were "privately educated" or had family members who were Tories. At the top of the list, it singled out Lord Finkelstein, a Conservative peer who is also a columnist and is close to George Osborne and David Cameron.

Rebuffing the suggestion, Tim Montgomerie, the newspaper's comment editor and a former editor of the ConservativeHome website, tweeted: "Did you see The Times splashes calling for Maria Miller [the Conservative former culture secretary] to resign? "

Meanwhile, Lord Finklestein mocked the list by tweeting: "Mine is best I think, though Alice [Thomson's] "the wife of the nephew of" is funniest."