Reform UK says two senior officials have stepped down as the party launched an investigation into claims about funding aired during a Channel 4 News report.

Nigel Farage’s senior aide Dan Jukes and Reform’s head of policy James Orr have both stood down pending the outcome of the internal probe, the party said.

The party added the investigation should be “allowed to proceed independently and without prejudice” and it would make no further comment for now.

The row threatens to overshadow Reform’s conference in Birmingham, which has its first full day on Friday.

In the Channel 4 report, which aired on Thursday night, undercover filming showed Jukes suggesting a way to get around electoral law to secure a foreign donation of £500,000 for the party.

The undercover filming was carried out by a group called Verbatim Investigations, which was founded by journalists from the Centre for Climate Reporting. Channel 4 News say they have verified the material they were given and chose to broadcast.

Reform has denied any wrongdoing and said it had “been the target of a hoax perpetuated by foreign-funded climate change activists”.

Labour and the Liberal Democrats have reported Reform to the Metropolitan Police over the allegations. The force said on Thursday it would assess the matter and any information provided to it.

In a statement on Friday, the Electoral Commission said: “We are considering all relevant information, in line with our regulatory remit, and we are in touch with the Met Police.

“The law requires political parties to report all permissible donations they accept with a value over £11,180 and all impermissible donations over £500.

“Information about any potential attempt to evade the controls on donations is for the police to consider.”

Jukes said: “This was entrapment over a prolonged period of nearly a year”, adding that he denied wrongdoing and had “stepped back from politics in order to clear my name.”

Orr told Sky News: “I have agreed to step down from my current role at Reform UK pending the outcome of the party’s internal investigation into the conduct of the program, with which I will cooperate fully.”

Reacting on Friday, Farage told LBC a “couple of our contractors have said things that shouldn’t have been said” and had been “removed this morning”.

The Reform UK leader added: “The party has broken no laws, the party has not taken any dodgy money or anything like that whatsoever.”

In response to allegations of “entrapment” from Jukes, a spokesperson for Verbatim Investigations told BBC News the investigation was carried out “to the highest journalistic standards”, adding: “As the footage shows, the plots we exposed were proposed by Mr Jukes and Mr Orr, not by our journalists.”

Farage appears to be trying to distance himself Jukes and Orr, with his comments to LBC.

However Jukes is widely seen as Farage’s closest aide, who is often at his side, and is judged to have an innate sense of his boss’s instincts. Jukes has long been the man you need to call if you want to arrange an interview with the Reform UK leader.

Orr, a Cambridge academic who has stepped down the party’s head of policy, could also be considered to be in Farage’s inner circle.

Channel 4 broadcast footage from a lunch in Clacton in Essex, with a reporter posing as the UK-based son, and an actor posing as his supposed American father. Opposite them are both Jukes and Farage.

Farage says “it’s all above board” after the son has told him he has been in discussions with both Jukes and Reform’s policy chief, James Orr about it for some time.

“I’ll be the registered donor,” the son says. “But then dad will send the money to me, and then as soon as that’s done and all those conversations are had the money is available.”

“Thank you. Well, both of you. Thank you,” Farage is heard saying.

Channel 4 say the proposed £500,000 donation was never made.

Earlier in the film, the reporter is recorded raising a concern with Jukes that his American father wouldn’t be able to directly donate to the party within the law.

Jukes tells him: “You do realise that you can do it?”

Channel 4 say Jukes was suggesting that the donation could be in the UK-based son’s name, although the money would have come from his American father.

“Actually that does strike me as a solution,” Jukes continues.

He then claims they have done it several times before, in exchanges bleeped out but which appear to refer to other instances where this mechanism had been used before.

“That’s one of the ways in which we do it,” he is recorded as saying.

Electoral law sets out that to be a permissible donor to a UK political party you must be a UK registered voter, or a company registered in the UK.

In this instance, the son would be a permissible donor, his father would not be.

Earlier in Channel 4 News’s film, prior to the suggested £500,000 donation, Channel 4 says Orr suggests to the undercover reporter that perhaps his father could pay for opinion polling to aid Reform’s campaigning.

The poll would cost £18,000 plus VAT – and Orr suggests that perhaps the polling company could send the bill to the undercover reporter.

In all, Channel 4 News says Reform commissioned three polls costing £32,500 in total and that the public was not told who commissioned or funded them.

Not disclosing such funding would be illegal and accepting this kind of foreign funding would also be illegal.

On Friday morning, Reform UK chairman Lee Anderson told Sky News there was “no chance” of Jukes and Orr returning to the party.

This appeared to be contradicted by Reform’s deputy leader Richard Tice, who told BBC Radio 4’s Today programme minutes later that “it’s not actually, in the nicest possible way, for any individual to make that determination” as the investigation continues.