A Brent Labour association has forfeited a £2,500 donation from an Asian bank after the electoral watchdog ruled it “impermissible”.

Brent North Constituency Labour Party received the money from the Bank of East Asia on May 10 but has now agreed to hand it to the Electoral Commission after notifying the body when it realised the donation was not within the law.

Although the bank has a branch in the UK, it is registered in Hong Kong and so is not allowed to give donations to political parties.

Brent North MP Barry Gardiner said the money was given “in good faith”, but because the party took more than a month to find out that the company was not eligible to donate, it could not give it directly back, so got in touch with the electoral watchdog.

Electoral rules state that parties have 30 days to check a donor is allowed before accepting money or returning it to its source.

The watchdog has powers to take legal action to order parties to forfeit donations, but it said this was not necessary as Brent North had agreed to give up the cash voluntarily.