Two senior Reform UK figures have stepped down after an undercover investigation appeared to show them arranging for a donor to pay for polling, in a potential breach of electoral law.

Reform's head of policy James Orr and Dan Jukes, a top aide to Nigel Farage, stood down pending the outcome of an internal probe that the party said would be conducted "independently and without prejudice".

Opposition parties have reported Reform to the police over what they allege is a breach of electoral law in the film, in which Orr and Jukes are shown arranging for a US 'donor' to pay for three arms-length surveys with pollster JL Partners. Under the Political Parties, Elections and Referendums Act 2000 (PPERA), donations to registered parties must come from permissible sources – broadly UK-registered voters and UK-based entities – and be recorded and reported to the Electoral Commission. Channeling funds through intermediaries to conceal the true donor, a practice known as circumvention, is prohibited under the same legislation, which is why the involvement of a purported US funder is central to the allegations.

The documentary aired on Thursday night just as Reform UK's party conference got under way in Birmingham. In it, Farage is filmed meeting the undercover journalist's representatives, telling them the polling was "amazing" and constituted great "bang for buck".

The sting was carried out by Verbatim, the investigative journalism arm of the Centre for Climate.

Promoting the benefits of building a relationship with the party, Jukes told the would-be donor: "If Nigel makes it to Number 10, you're having a pint with who's effectively gonna be his chief of staff in Number 10. If that isn't a business interest, I don't know what is."

Reform policy chief: 'Don't breathe a word of this to anyone'

Orr is recorded telling the 'donor' – a Verbatim journalist – that Farage would maintain a distance from the polling operation. "I wouldn't breathe a word of this to anybody," he said. "Nigel doesn't know. Won't know. It's the kind of thing he would rather not know."

Orr, widely viewed as the main intellectual force behind Reform UK, also suggested in the secretly filmed footage that the public would never learn the real source of the funding, and branded the elections watchdog "completely useless".

Speaking to LBC, Farage said the sting was entrapment.

"The party has broken no laws, not taken dodgy money or anything like that. It's a clear case of entrapment, and they got a couple of our contractors to say things that perhaps should not have been said. They have been removed this morning. I'm not happy about it.

"An independent third party commissioned a poll. It was helpful to Reform but we had nothing to do with it. There's nothing illegal about it. Polling can be paid for by anybody providing it was put into the public domain.

"There's no question of illegality – I have a strong KC's opinion on that. It was an independent third party. That is nothing."

He added: "We threaten the whole establishment ecosystem which has been in power for 100 years. They don't want a new political party, a new set of faces coming in and taking over. No illegal transaction has occurred."

Reform has denied any wrongdoing and branded the undercover operation a "political sting from some net zero activists". The party said it would not comment further while its investigation is ongoing.

Following the report, the Liberal Democrats' Cabinet Office spokeswoman Lisa Smart wrote to the Met Police's special enquiry team about what she described as a "potential serious breach of electoral law" (x.com/LibDems).

"The breach raises alarming questions about whether there has been a wider complacency toward foreign interference by the individuals involved," she added.

Labour has said it also intends to report the matter to the police, while the Green Party has called for a probe as well.

"This scandal goes right to the top of Reform UK," Labour party chair Bridget Phillipson said (x.com/bphillipsonMP). "Nigel Farage needs to urgently prove today that his top team haven't broken the law and secretly plotted to undermine our democracy.

"It's not just Farage's secret £5 million 'gift'. Time and again he and his mates think the rules don't apply to them. The sleaze and scandal now engulfing him and his Party isn't going away – it's getting worse."

The investigation plunges the party into another sleaze scandal, months after questions over the nature of a £5m gift from a cryptocurrency billionaire forced Nigel Farage to resign as an MP and call a byelection. The party leader comfortably won the vote last month.

The Met Police said in a statement: "We're aware of media reporting on Thursday, 3 September involving political party donations and an alleged breach of the Political Parties, Elections and Referendums Act 2000 relating to polling.

"We will assess this matter and any information provided to us." The force's special enquiry team handles complaints involving elected officials and party funding, and any assessment it makes will determine whether a full investigation follows. Separately, the Electoral Commission has powers to investigate PPERA breaches and can impose fines on parties, meaning the episode could face scrutiny from both police and regulator even if no criminal case results.