It also prompted denials that Russia might have had a hand in steering British public opinion.

The "suspected electoral law offences" were "appropriate" grounds for serious fraud specialists from the National Crime Agency (NCA) to go into action, the NCA said on Thursday (1 November).

It went ahead after the Electoral Commission, a British regulator, said its own, one-year long investigation had given "reasonable grounds to suspect" that a British businessman had illegally bankrolled the Brexit side.

Arron Banks, a 52-year old insurance tycoon, had openly contributed £8m (€9m) to pro-Brexit groups, of which £2.9m was used directly in the campaign, the commission said.

But its scrutiny of bank transfers showed that he "was not the true source" of the funds, which instead came from a "shareholder loan" to his firm, Rock Services, from an unknown third party.

"Mr Banks and Ms Bilney ... knowingly concealed the true circumstances under which this money was provided," an Electoral Commission lawyer, Bob Posner, said, referring to Elizabeth Bilney, one of Banks' associates.

"The sums of money involved in these matters are significant," the electoral commission added, after the pro-Brexit side won the referendum by a narrow margin of 51.9 percent against 48.1 percent in June 2016.

The revelations prompted some opposition MPs to pause Brexit pending the NCA action.

It "must be put on hold until we know the extent of these crimes against our democracy", David Lammy, from the opposition Labour Party said.

Phillip Lee, a pro-EU MP from the ruling Conservative party, added: "It is not OK to proceed with Brexit while such big questions about such serious allegations remain unanswered."

But the British government ruled out such any such move.

"The referendum was the largest democratic exercise in this country's history and the PM is getting on with delivering its result," the office of British prime minister Theresa May said on Thursday.

The government had so far "not seen successful interference in UK democratic processes", her spokeswoman also said.

Russia

The Electoral Commission report on Banks and Bilney did not mention Russia.

But the case comes amid accusations that Russia interfered in Brexit the same way it later interfered in the US election and in the French and German elections in 2017.

It also comes after MPs grilled Banks over his links to Russian investors and meetings with Russian diplomats.

For her part, Bilney rejected the idea that Moscow was behind the dubious "shareholder loan".

"I can confirm it wouldn't have come from Russia … I run the group companies where the money was from and we don't have any transactions that are from Russia," she told British broadcaster the BBC on Thursday.

Banks also denied "the ludicrous allegations levelled against me, adding: "I am a UK taxpayer and I have never received any foreign donations."

The Electoral Commission had acted under "intense political pressure from anti-Brexit supporters," he said.

"Crikey ... it's not like I ordered the murder of someone inconvenient," he also joked on social media.

"I'm in Bermuda fishing," he said.

EU negotiations

The Banks affair comes at a sensitive time in British-EU negotiations.

Talks remain locked on issues such as the Irish border and the future of the City of London, amid speculation that the EU might call an extraordinary summit in November ahead of Britain's exit in March.

British newspapers the Financial Times and The Times, reported, separately, on Thursday that the EU had proposed a new solution on Ireland and on the City, loosening single market rules on customs and financial trading.

That saw the British pound jump in value, amid market jitters on the implications of a no-deal British EU exit.

But Downing Street and the EU negotiator, French politician Michel Barnier, later denied that new proposals were afoot.

The British foreign secretary, Jeremy Hunt, also admitted to MPs in parliament on Thursday that he was drawing up plans to get home British people if they were stranded in Europe in the case that a no-deal Brexit had led to cancelled flights.