Far right party the BNP could be handed £40,068 of taxpayers’ money to contest elections in Birmingham under controversial plans to be announced this week.
A report on funding is set to call for a cap on the money parties can receive from trade unions or businesses - with the cash replaced by a handout from taxpayers.
The proposal, to be published by the Committee on Standards in Public Life, would mean parties got £3 for every vote they received.
Cash would be handed to parties to campaign in the next election, likely to be in 2015, based on the number of votes they received in 2010.
It means the BNP would get £40,068 after gaining 13,356 votes in Birmingham last year, some of which could be spent on leaflets and other propaganda.
Nationally, the BNP would get around £1.69 million, having gained 563,743 votes last time.
The party only stood in about half of the UK’s constituencies at the 2010 General Election and state funding could help them field candidates in every constituency across the country.
It claims to be a party representing “indigenous British people”, meaning white people. In the 2010 election the BNP manifesto included a promise to introduce a system of “voluntary resettlement” in which “immigrants and their descendants are afforded the opportunity to return to their lands of ethnic origin”.
Liberal Democrats have been pushing for state funding of political parties, arguing that it would reduce the ability of big business and trade unions to influence Government policy by making donations.
Around £100 million would be allocated to parties under the plans to be published each week, with the Tories and Labour Party gaining the most.
But the proposals are set to be highly controversial.
Stourbridge MP Margot James (Con) said: “I’m absolutely opposed to any suggestion that funding for parties should be taken out of the public purse in the current economic climate.”