Nigel Farage has acknowledged the overseas donation row engulfing Reform UK “looks bad” for his party but denied it had ever taken foreign money in breach of electoral law.

The Reform leader, who is battling to contain the fallout from the allegations, was asked to categorically rule out that foreign money had ever been funnelled to his party. He replied: “I can … never happened.”

Farage was forced to suspend his close aide Dan Jukes and Reform’s head of policy, James Orr, on Friday after they were filmed in an undercover investigation apparently plotting to get around electoral laws on foreign donations.

In an interview with the BBC’s Laura Kuenssberg, Farage described their comments as “injudicious at best” and admitted the optics of the undercover filming were problematic for his party, which has in the past tried to suggest it would do politics differently.

“This looks bad, as does the sale of peerages, as does government contracts for donations,” he said. “We are not the first people to be involved in a row over donations.”

The Metropolitan police are now assessing the evidence after a complaint that Farage and his aides have broken political funding laws, with sources suggesting a full investigation is expected to be launched. They all deny wrongdoing.

Scotland Yard could extend an existing investigation into whether Reform took donations channelled through an intermediary from potentially impermissible sources, which the party and donors deny.

Farage is already facing intense scrutiny about Reform’s finances, as well as a £5m gift by a crypto billionaire shortly before announcing he would stand in the 2024 general election, which he has since said was intended to pay for security.

In an earlier extract of the BBC interview, Farage also claimed he “wasn’t even listening” during the meeting at the centre of the controversy, and that he knew donation law “better than anybody”, as he sought to limit the damage caused by the allegations.

Robert Jenrick, Reform’s Treasury spokesperson, said on Sunday that he had seen legal advice that the party had not in fact broken electoral law over foreign donations but that lessons would be learned from the episode.

“We’re going to investigate exactly what happened,” Jenrick told Sky News. “It’s right to have due process. But this is not the way that Reform conducts itself.

“Like any political party, we seek to abide by the law at all times, and we believe we have in this case. In fact, I’ve reviewed the legal advice from the KC who’s advised the party in the last 48 hours, and it shows that, yeah, we did.

“But do we want for the best version of ourselves? Yes, absolutely. And no doubt there will be lessons to be learnt from this.”

Speaking after the BBC interview, the business secretary, Jonathan Reynolds, said: “For a political party that don’t like foreigners much they do seem to have a soft spot for foreign cash. We have rules in this country about how our democracy works and everyone has to stick to them.”

He added: “I think you see someone struggling to decide whether they’re really serious about trying to run for power or want to keep the protest going.”