The leader of the far-right, anti-immigration Reform UK party, Nigel Farage, has resigned from his seat in parliament and plans to stand again for his constituency amid allegations that he received and failed to declare millions of dollars in donations.

The surprise announcement came on Tuesday as Farage faced the possibility of a parliamentary investigation into at least two funding scandals. A finding against him could have seen Farage suspended from parliament, possibly triggering a recall petition and a by-election in his constituency, Clacton, in eastern England.

By stepping down preemptively, the Reform leader, whose popularity has soared over the past two years and who is now viewed as a favourite to be the next prime minister, has triggered a by-election on his own terms – in which he himself can stand.

“The people of Clacton should be the judges of my actions,” Farage said on Tuesday. “This will be a people vs the establishment by-election.”

Farage added: “I will fight to win.”

Other parties have already stated that they will not field candidates for a by-election Farage triggers.

The right-wing populist leader has been one of the loudest anti-immigration voices in the United Kingdom and was key to securing victory for the Brexit movement. His Reform party currently has just eight of 650 parliament seats but has been leading in opinion polls as anti-migrant sentiments flare in the UK. Last year, a YouGov poll found that Reform would likely win a general election were one to be held then.

In May, Labour lost massively to Reform in elections in Wales and Scotland and 136 local council elections in England. While Reform gained more than 1,450 seats, including in Labour strongholds, the governing party lost more than 1,460 seats, giving a strong indication of the surge in support for Reform across the country.

Here’s what we know:

What is the funding scandal surrounding Nigel Farage?

Farage is facing an investigation by parliament into donations, including allegations he received undeclared money for his campaign.

Receiving gifts is not against parliament’s code of conduct, but failing to declare them can be.

The main investigation is one conducted by the Parliamentary Commissioner for Standards into a 5-million-pound ($6.7m) undeclared donation Farage received from Thailand-based cryptocurrency billionaire Christopher Harborne before announcing his candidacy in the 2024 general election.

On Tuesday, The Guardian newspaper said bankers had reported the donation to the National Crime Agency as potentially laundered money.

Farage has claimed the money was a personal gift, he received it before being elected to parliament and, therefore, it does not breach parliamentary rules.

“I have done nothing wrong. I have not broken the law in any way at all. I have not misused public money,” Farage said on Tuesday.

Separately, an investigation by The Sunday Times this week found that Farage received donations from convicted fraudster, cryptocurrency entrepreneur and longtime ally George Cottrell for security and staffing before the 2024 elections.

Cottrell, who has served as Farage’s aide in the past, was arrested in the US in 2016 while travelling with Farage on charges that he had offered to launder money for undercover agents posing as drug traffickers. He served eight months in prison and was released in March 2017.

Responding to the allegations on Sunday, Farage said he had done “nothing wrong” and was considering legal action against The Sunday Times.

On Monday, United States President Donald Trump, an ally of Farage, appeared to back the politician in a post on his Truth Social platform by sharing a link to an article headlined: “They’re running the 2024 anti-Trump playbook on Nigel Farage.”

Why are other parties refusing to contest a by-election?

The ruling Labour Party and opposition Conservatives and Liberal Democrats have all accused Farage of “playing games” and said they will not put candidates forward in a by-election.

On Tuesday, Prime Minister Keir Starmer said Farage’s announcement was a “desperate stunt” because the Reform politician was “up to his neck in sleaze”. The Labour Party has already referred the Cottrell case to the Electoral Commission.

Foreign Secretary Yvette Cooper told the BBC: “Nobody is going to get drawn into what is a political stunt by Nigel Farage because he wants to duck and dive around the rules that apply to everyone.”

Kemi Badenoch, leader of the Conservatives, said her party “will not be standing a candidate in the fake by-election that Farage is causing to distract people from what is happening”.

While the parliamentary investigation into his affairs will be on hold for the duration of a by-election, it would resume if he regains his seat, which he is expected to do.

He comfortably secured more than 40 percent of the vote in Clacton in 2024 and will not face opposition from major parties in 2026.

If he’s re-elected, he could still be suspended and yet another election could be called in Clacton, this time without him as a candidate.

What has Reform UK said about all this?

Reform UK has sounded a defiant tone amid the scandal.

Deputy leader Richard Tice told UK media channel TALK that Farage will “receive a dramatically increased majority” in the by-election and the numbers will “prove to the rest of the electorate that more people want to vote for Nigel and Reform because they recognise that Britain is broken”.

In a post on X, the party said: “For too long the establishment in Westminster has passed judgement on Nigel Farage’s political integrity.”

“It’s time for the people of Clacton to decide,” it added.

Reform has also said it will pay for the by-election in Clacton in what critics say is an attempt to deflect claims it is wasting taxpayers’ money.