The Liberal Democrat candidate for Brent Central has quit his party following claims he sought to bypass party funding laws.

Ibrahim Taguri said he will stand as an independent candidate for the hotly contested seat after he allegedly told an undercover Daily Telegraph reporter posing as a wealthy Indian businessman that he could channel donations via family members and backdate cheques to avoid appearing on public registers.

The party’s former chief fundraiser and race champion was also said to have promised big donations could “open doors” and introduced the fake donor to key party figures including Treasury Chief Secretary Danny Alexander.

The 36-year-old, who grew up in Willesden, has denied any wrongdoing and said he was “confident that I will be exonerated of all the claims made against me”.

He added he hops to return to his part after his name has been cleared.

A party spokesman said it had referred the matter to the Electoral Commission and denied accepting any improper or illegal donations.

In a statement, Mr Taguri said: “I want to ensure that Liberal Democrats are returned to government in the next general election.

“I believe that Britain will only have both a stronger economy and a fairer society with Liberal Democrats in government.

“That is why while these investigations are taking place, I will step down as Liberal Democrat Race Equality Champion and Parliamentary Candidate for Brent Central.

“I am happy to co-operate with any investigation and I am confident that I will be exonerated of all the claims made against me. Not only do I deny the allegations made against me I am capable of demonstrating that I have gone above and beyond the legal requirements in the interests of transparency.

“I will continue my campaign to become the next MP for Brent Central as an independent candidate with the intention of achieving the one thing I entered politics to do, to end child poverty in the UK by 2020.

“I look forward to clearing my name and returning to the Liberal Democrats. I want to send a huge thank you to everyone who has supported me so far and I will continue to stand up for anyone in Brent Central who needs help.”

Mr Taguri was chosen as the Lib Dem candidate for the seat after the party’s current MP announced she would step down in May last year.

Former Brent South Labour MP Dawn Butler, who lost to Ms Teather, will battle against him for the seat.

Ex-Brent councillor Alan Mendoza is the candidate for the Conservatives, Stephen Priestley will stand for UKIP, and Shahrar Ali for the Greens.