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Nigel Farage has been reported to Britain’s racism watchdog.

The Ukip leader suggested people in London would be right to be concerned if Romanians moved in next door.

The watchdog confirmed today that it has powers to investigate acts of prejudice and take individuals to court.

The move follows weeks of coverage on Ukip election candidates making controversial comments, which Mr Farage had previously put down to a few “idiots”.

The constant accusations of racism dogging Ukip appear to have damaged the party with a poll today showing its lead going into Thursday’s European elections has plummeted.

In response, it organised a carnival-style event in London today — complete with steel drums — in an effort to show it has candidates from diverse backgrounds.

Mr Farage was yesterday reported to the Equality and Human Rights Commission in a letter by Labour MP Keith Vaz, who chairs the Commons Home Affairs Committee.

Mr Vaz wrote: “I’m deeply concerned by Mr Farage’s comments, which are racially aggravated and offensive.

“No one should be allowed to attack people from another country purely on the basis of their nationality.”

Mr Farage said in an interview on LBC Radio on Friday: “I was asked ‘if a group of Romanian men moved in next to you, would you be concerned?’ And if you lived in London, I think you would be.”

He later backtracked, saying he was “tired out” and did not use the “form of words” he would have liked to.

Among a string of recent controversies, a candidate — who has since left Ukip — said comedian Lenny Henry should “go back to a black country”.

Another wrote on Facebook asking friends to explain “how Mo Farah, an African ... has won a gold medal for Great Britain”.

A British Asian leader of Ukip’s youth wing quit the party after branding figures in the party as “racist”.

Ukip organised its carnival event today in an attempt to send out a more “positive” and “vibrant” message.

But a poll by TNS showed Ukip’s previous poll lead over Labour in the European elections had fallen from nine to just three points.

Ukip is now polling 31 per cent to Labour’s 28 per cent. The Tories were at 21 per cent, up three points, and the Liberal Democrats on seven per cent, a three point drop.