Russia denounces Ukraine 'terrorists' and west over Yanukovich ousting

Flowers cover the foot of the independence monument in Kiev. Photograph: Sergii Kharchenko/NurPhoto/Corbis

Moscow delivered a damning indictment of post-revolutionary Ukraine on Monday, denouncing alleged discrimination of the ethnic Russian minority, accusing the west of sponsoring a takeover of the country by "terrorists" and "extremists", and clashing with Washington over plans for early elections in May.

"Russia is extremely concerned about the situation in Ukraine," said a foreign ministry statement, which followed the highest-level reaction from Moscow so far to the collapse of Viktor Yanukovych's presidency. Dmitry Medvedev, the prime minister and former president, accused the post-Yanukovych authorities and parliament of lacking legitimacy.

"If you consider Kalashnikov-toting people in black masks who are roaming Kiev to be the government, then it will be hard for us to work with that government," Medvedev said. "Some of our foreign, western partners think otherwise, considering them to be legitimate authorities. I do not know which constitution, which laws they were reading, but it seems to me it is an aberration … Something that is essentially the result of a mutiny is called legitimate."

The blistering language from Moscow, the first real response to the crisis from Ukraine's neighbour and former overlord, collided with western attempts to keep the Russians onside for the looming challenge of establishing a stable, inclusive government and coming up with a multibillion-dollar rescue to try to stabilise an economy in freefall.

The new interim leaders of Ukraine said the country needed $35bn (£21bn) over the next two years and fast action on a bailout, as Moscow signalled its was freezing its $15bn in cheap loans – the package offered in November when Yanukovych triggered the uprising by turning to Russia and away from the European Union.

A wanted poster for Victor Yanukovich in Kiev Photograph: Yannis Behrakis/Reuters

The Russian foreign ministry statement pressed all the buttons that will have the west and Kiev alarmed about ethnic and religious strife fracturing the country in two. It complained that ethnic Russian rights were already being violated after the parliament rescinded the status of Russian as a second language.

"Referring merely to revolutionary expediency, [the parliament] is imposing decisions and laws aimed at repressing the human rights of Russian and other national minorities. There are even calls for a complete ban of the Russian language," it said.

Moscow opposed plans for early elections in May, calling first for constitutional changes and a referendum. This contrasted with the stance of the US state department, which announced that William Burns, the senior diplomat credited with engineering a recent breakthrough in US relations with Iran, would travel to Kiev. It said Burns would "urge the new government to take all steps necessary for free and fair presidential elections in May. He will urge the rapid formation of a national unity government."

The collapse of the Yanukovych administration late on Friday is a setback to Vladimir Putin in Moscow, while Europe and the west are seen as the international beneficiaries. But with the Ukrainian economy on the brink of insolvency, the west is now under pressure to deliver tens of billions in aid.

It was clear that the west would insist on a programme under the International Monetary Fund, which would come with very tight strings attached. But it appeared that the EU, US and other international actors would go beyond an IMF package with bilateral financial support. Berlin spoke of organising an international donors' conference to raise funds from Japan and China, while stressing that it wanted Russia as part of the funding team.

Dmitry Medvedev, the Russian prime minister. Photograph: Astakhov Dmitry/Itar-Tass/Corbis

The US said Burns would "be accompanied by representatives of the Department of the Treasury and the National Economic Council, who will work in concert with partners such as the EU and the IMF to discuss needed financial support while a new government implements the difficult steps necessary to reform the economy".

The US treasury secretary, Jacob Lew, told Arseniy Yatsenyuk, tipped as Ukraine's next prime minister, that the US, "together with Europe and others in the international community, are ready to supplement an IMF programme to cushion the impact of reforms," according to a treasury statement.

The British foreign secretary, William Hague, said he would visit Ukraine shortly, and said the country needed urgent international financial help. Hague is due to travel to Washington later on Monday to discuss Ukraine with the US secretary of state, John Kerry, and the IMF. He said the IMF was best placed to provide financial support and advice to Ukraine. "Ukraine's financial situation is very serious and without outside assistance may not be sustainable," Hague told parliament.

The Russians bitterly criticised everything that had happened in Ukraine since Friday, arguing that the events were at odds with the settlement terms agreed by Yanukovych and opposition leaders in 24 hours of tough negotiations mediated by three EU foreign ministers last Thursday and Friday.

The full Russian support for this agreement appeared odd since Moscow was also involved in the negotiations in the person of Vladimir Lukin, a former Russian ambassador to Washington, who left the talks hours early, and Russia was the only party present that refused to sign the settlement. Lukin abandoned the talks, describing the street protesters as "nationalists", "revolutionaries" and "terrorists".

The Russian statement on Monday said events in Ukraine since the weekend "discredit the initiators and their guarantors [EU], threaten civic peace, social stability and public safety. We are bound to note that several of our western partners show no concern for the fate of Ukraine, but for one-sided geopolitical calculations. There is no sign of real assessment of the criminal acts of extremists, including neo-Nazis and antisemites."

January surplus of £4.7bn smallest in four years

The chancellor, George Osborne, is just about on track to meet the Treasury’s official full-year borrowing forecast of £111.2bn, say economists. Photograph: Dan Himbrechts/AFP/Getty Images

The chancellor, George Osborne, will have no room for major tax or spending give-aways in next month's budget after figures showed a smaller than expected tax windfall in January.

The latest data from the Office for National Statistics showed that the UK is on course to meet its full-year borrowing targets but left the chancellor with minimal margin for error.

showed full-year borrowing is on course to just about meet the Treasury's official forecast.

A January surplus of £4.7bn was much lower than the £8.1bn forecast by economists and smaller than the £6bn recorded in the same month last year.

The start of the year is typically a bumper month for the public purse thanks to a glut of income tax and corporation tax payments, but last month showed the lowest January surplus in four years.

Government coffers were hit by lower receipts from income and wealth taxes despite a broader economic recovery and falling unemployment. Corporation tax receipts were also lower than last year, after a sharp fall in receipts from oil and gas companies due to a decline in North Sea production.

Economists described the last set of borrowing figures to be published before the budget on 19 March as disappointing. They said the chancellor now had a limited chance of significantly undershooting the Office for Budget Responsibility's forecast for £111.2bn of full-year borrowing, limiting his ability to woo the electorate by announcing big giveaways ahead of the 2015 general election.

John Hawksworth, chief economist at accounting group PwC, said: "This reinforces the message that there is still a long way to go to put the public finances back on a sound footing, and is likely to imply a relatively cautious approach by the chancellor in the budget.

"As he made clear in the autumn statement [in December], there are still many years of fiscal austerity to come and little room for pre-election giveaways."

Government borrowing totalled £90.7bn in the first 10 months of the 2013-14 fiscal year. Responding to the borrowing figures, Labour said George Osborne was set to break his promise to "balance the books" by 2015-16, made when the coalition came to power.

"This is the cost of the three damaging years of flatlining and falling living standards we have seen since the election," said Chris Leslie, the shadow chief secretary to the Treasury.

January is typically a bumper month for the public purse, as a result of income tax and corporation tax payments. Last month however the government coffers were hit by lower receipts compared with a year earlier, mainly from income and wealth taxes despite broader economic recovery and falling unemployment.

Corporation tax receipts were also lower than last year, after a sharp fall in receipts from oil and gas companies amid a decline in North Sea production.

A spokesman for the Treasury said: "The government's long-term economic plan is working. The deficit has fallen by a third. But as today's figures show, the job is not done and the biggest risk to the recovery would be abandoning the plan that is boosting economic security for Britain's hard-working people."

Andrew Goodwin, a senior economic adviser to economic forecasters the EY Item Club, said the weakness in income tax seemed to reflect very low receipts from self-assessment forms, with payments possibly delayed until February.

"Given that a sizeable chunk of the revenue comes in after the self-assessment deadline, it is quite possible that this weakness will reverse next month, but this does send us into the budget on a somewhat downbeat note," he said.

There was mixed news for the chancellor in further official data that showed January retail sales fell more than expected on the previous month but were still up on the same period a year ago.

Economists said consumer spending was still likely to deliver a sizeable boost to the economy in the first quarter, with the outlook for retail sales benefiting from rising employment and easing inflation.

The Office for National Statistics said retail sales fell 1.5% in January compared with December, the biggest drop since April 2012. A slowdown had been expected after a strong Christmas.

Retail sales were still up 4.3% on 2013 as analysts said the overall picture was relatively buoyant. "The underlying trend in the data suggests that a brightening mood among UK households is translating into higher consumer spending," said Chris Williamson from data specialists Markit.

Scottish independence: Cameron to promise North Sea oil revolution

David Cameron will say that the future of North Sea oil and gas depends on Scotland remaining in the union. Photograph: Alamy

David Cameron will use his first ever cabinet meeting in Scotland to promise a revolution in North Sea oil and gas extraction worth up to £200bn over two decades – but that this will only be affordable if the union stays together.

As the PM and his entourage make the trip to Aberdeen, he will set out steps to revive the industry, which has suffered declining production for years. His visit to Scotland comes as two new polls found a growing number likely to vote no to independence, with 37% for and 47-49% against.

Alex Salmond, the Scottish first minister, will hold a cabinet meeting just six miles from Cameron's event on Monday, having criticised the prime minister for refusing to meet and debate the issue of independence with him. He has put the oil industry at the heart of his campaign, telling Scots that remaining reserves are worth £300,000 per person.

However, Cameron will try to undermine that claim by arguing that the "broad shoulders" of the UK government are needed to support North Sea oil and gas in the future.

Under plans to boost the industry, Cameron will agree to adopt all the recommendations of an independent report by Sir Ian Wood, a retired oil billionaire, who believes the creation of a new regulator and more cooperation between companies could increase production by up to 4bn barrels.

Ed Davey, the energy secretary, has said the proposals could be an even bigger boost than the exploitation of shale gas, which seniorConservatives have hailed for its potential to bring down bills and increase energy security.

Cameron's announcement implies that Scotland would be unable to sustain such a large increase in support for the industry as an independent country.

Downing Street stressed that the UK was "well placed to absorb the shocks of oil price volatility that would dramatically affect a small country's budget".

The Scottish government backs the creation of a new Aberdeen-based oil and gas regulator but strongly disputes that the combined might of the union is needed to sustain the industry. The UK government has already provided tax breaks to the oil industry for difficult fields and to help with decommissioning old ones. There was a sharp fall in tax receipts from the North Sea industry in the most recent official treasury figures, but the government insists its incentives are beginning to attract billions of pounds in investment in getting more oil out of the ageing fields.

The Scottish Tories warned that Scots would face much higher VAT payments after independence, perhaps worth billions of pounds, because they would lose the UK's historic opt outs that allowed zero VAT rates on children's clothes and shoes, books, charities, new buildings and industries such as ship building.

The Scottish Tory leader, Ruth Davidson, published a letter from the head of the European commission's VAT unit in Brussels that said new EU member states had to apply a minimum 15% VAT rate on nearly all its goods.

Donato Raponi, from the commission's taxation and customs directorate, told the Tory MEP Struan Stevenson that new members were able to negotiate transition arrangements after joining, but would only be allowed "one or two" reduced rates on a permanent basis, and then no lower than 5%.

Speaking as both pro- and anti-independence camps traded fresh claims and counter-claims, Davidson said: "No ifs, no buts – those are the rules for any new member.

"It's not just Scottish families that would be affected, but Scottish business too. None of this has been spelled out by the SNP. We now need Salmond to tell us fairly and squarely – what will VAT rates be on all these household items after independence?"

In turn, John Swinney, the Scottish finance secretary, stepped up pressure on Cameron by warning that UK Treasury would face higher debt interest payments of up to £5.5bn a year if it vetoed a currency union with an independent Scotland.

Swinney backed up Salmond's claims that an independent Scotland would be under no obligation to pay its share of the UK's debt mountain – due to reach £1.6tn by 2016, if the UK rejected his "fair and responsible" proposal for a new sterling area with Scotland.

He said that would add an extra £130bn worth of debt on the UK's books, which in turn would mean extra annual interest payments of £4bn to £5.5bn a year – equivalent to an extra 1p on income tax.

Arguing that would mean "a significant and unnecessary cost to taxpayers" in the rest of the UK, Swinney said: "This is just one of the reasons, alongside the costs that rejecting a currency area would impose on business in the rest of the UK, that the Treasury will drop this bluff and bluster the minute the campaign is over."

Business leaders have been reluctant to speak out about the independence debate but a survey published by the Financial Times from headhunters Korn Ferry showed that 65% of the FTSE 100 chairmen who participated said it would be bad for British business. Some 17% said independence would be good and 7% said it would be "very good". Korn Ferry spoke to 29 chairmen representing 32 FTSE 100 companies

Rotting meat at Irish factory 'destined for burgers', Polish report says

Photograph showing meat detained at the Irish burger manufacturer. Photograph: Supplied by chief veterinary officer of Poland

A large consignment of green and rotting meat fit only for petfood was found by Polish food safety investigators investigating the horsemeat scandal at a leading Irish processor – prompting claims it could have ended up in the human food chain.

The meat was found at the giant Silvercrest factory in County Monaghan,Ireland, which produced frozen burgers adulterated with horse for Tesco, Aldi, the Co-op and Burger King. The investigators examined the raw material in early 2013 as part of their official inquiry in to the scandal.

Their report suggests recycling meat deemed 'not fit for human consumption' into the human food chain was part of the horsemeat fraud. But the Irish manufacturer, backed by the Irish government, says it was rotting only because it had been stored for inspection as part of the horsemeat inquiry. They say the quality of the meat had been affected by repeated unpacking and examination as part of the investigation.

The 30-page report by the chief veterinary officer for Poland was compiled after a formal visit by inspectors to Irish plants implicated in the horsemeat scandal. Photographs of the meat showed it was a mixed batch of very poor quality and parts had turned green. Polish investigators say it was destined for burgers but must have been unfit for human consumption all along. "What I saw was clearly unfit for human consumption. It was part of a bigger consignment but I was told the rest of it had already been used," inspector Katarzyna Piskorz said. "I asked why the factory managers had not noticed the state of it, but was told they had not seen any problem."

The Polish report explains how inspectors examined eight pallets of meat from a delivery of 22 pallets that had been destined for burger production. The pallets had been detained at Silvercrest in January 2013 by the Irish authorities, who had sealed them in a refrigerated lorry when horse DNA was found in the consignment.

The Polish team insist the Irish authorities had allowed them to examine meat that had not been fully unpacked before their arrival and, but for the discovery of horse, would have been sold as burgers.

Spacers made from paper rather than cardboard. Photograph: Supplied by chief veterinary officer

When it was fully unpacked, they say they found old meat that was green and rotting or brown and had been deliberately mixed with fresher red meat. The meat pictured in their report is unhygienically wrapped and labelled with official Polish veterinary marks and factory labels that the Polish authorities believe are copies or reused from other consignments.

ABP said the meat and its packaging had deteriorated because it had been stored in a refrigerated lorry for three weeks under quarantine conditions – rather than those for meat intended for the food chain. It said the meat had deteriorated while being moved and unpacked for testing. All the meat arriving at the factory had the correct documentation on arrival and would have been tested before being passed, it said. ABP also insisted none of the burger meat in the consignment had left its plant or entered the food chain.

However, the former head of enforcement for Northern Ireland's agriculture department, Mike Steel, expressed doubts about this explanation. Meat that had been poorly stored and moved for testing would be expected to rot uniformly and not in the patchwork way seen in the photographs in the Polish report, he said. The photographs and descriptions suggested meats of different origins and freshness had been mixed and frozen from the start in a way not seen in authentic beef trimmings intended for the human food chain, he added.

"The temperature in the refrigerated vehicle is not specified but it should have been low enough to prevent significant deterioration in meat stored as evidence, over a period of four weeks. Nonetheless, if the meat had deteriorated I would have expected it to deteriorate more uniformly. The condition of the meat and packaging, as photographed, appears to me to be significantly worse than would be attributable to normal storage and sampling of blocks of frozen meat."

Speaking to the Guardian, the Polish inspectors reiterated their belief that the pallet they inspected had not been defrosted between the time the meat was detained and their arrival weeks later. "Irish inspectors and a company [manager] said these pallets had been not unpacked [and] had been not defrosted too," Piskorz said. If the rotting had been caused by repeated unpacking, the meat would not have looked as it did, she claimed. "In my opinion, the green and brown meat mixed with red meat could not be the result of three weeks in the lorry. It is impossible. After three weeks in high temperature, all meat should be green or brown. It would be putrid, not some red like fresh frozen meat."

The Polish inspection team said they were also told of further fears that unfit food had entered the human food chain.

This fear related to a Northern Irish cold store caught with a large consignment of horsemeat on its premises. The meat had originally been supplied to another Irish burger manufacturer. Fragments of red plastic packaging were found in the blocks of meat, meaning it should have been condemned as unfit. The Polish CVO report says that UK investigators believed initially the print on the fragments said "Friskies", the name of a petfood brand. But sources close to the investigation say they now believe the label says "frosties", and may be discarded sweet wrappers.

The UK regulator the Food Standards Agency said it had been unaware of the Polish report. As a result of the Guardian's investigation, the FSA has passed the findings to the City of London police, which is responsible for the UK end of the criminal investigation into the horsemeat fraud.

The Irish government confirmed Polish officials had told it about the report last December, but said the authenticity of the labels on the meat was a matter for the Poles.

Prof Chris Elliott, who has been asked by the UK government to review the horsemeat scandal, said the Polish findings raised serious health and safety concerns. "From the investigation by the Polish authorities we now have allegations that part of the fraud involved meat that was not fit for human consumption entering the food supply chain. They are disputed but they have supported their allegations with substantial photographic and documentary evidence, and if the allegations are correct, it is a very worrying development."

ABP, the high street retailers and Burger King, which sold burgers adulterated with horse, have always maintained that they were unwitting victims of fraud elsewhere in the supply chains. ABP has acknowledged its Silvercrest factory breached its contracts by sourcing cheap meat from suppliers not approved by its customers and blamed rogue managers, but said it had never knowingly handled horse. ABP has since sold the factory. The cold store in which the label fragments are said to have been found did not respond to Guardian inquiries.

Mike Steel added: "It is difficult to provide a reasonable explanation for this reported finding of fragments of packaging in the cold store meat.

"No extraneous material should be found, nor is usually found, among the blocks of meat fit for human consumption. Normal packaging and processing does not allow it to happen. That any extraneous material should be found in this way raises serious questions about where the pallet was assembled.

Voters fall off London's housing ladder as super-rich leave property empty

London property: gold bullion in the sky, according to Boris Johnson, the city's mayor. Photograph: Belinda Lawley for the Guardian

London's most desirable housing enclaves are haemorrhaging voters, according to figures fuelling fears that foreign buyers are turning primeproperty into vacant investment assets.

More than 2,000 voters have disappeared from five wards in Westminster in the past 12 years, according to electoral registration data published this week.

The biggest fall has been in Knightsbridge and Belgravia, where there are now 11% fewer voters than in 2002. In the West End ward, which covers Mayfair and Soho, there are 498 fewer registered voters, a drop of 7%. There have been 5% falls in Abbey Road and Bayswater and a 4% fall in the area around Marylebone High Street.

As only UK, European Union or Commonwealth citizens can register to vote, the registration data is being seen as evidence that investors from east Asia – especially China – Russia and central Asia are increasingly using London property as what the London mayor, Boris Johnson, calls "gold bullion in the sky".

The slump in voters in the five prime areas comes despite a substantial increase in the number of homes: between 2001 and 2011, 4,209 new dwellings were made available, according to census data. Yet the number of voters registered between 2002 and 2014 fell by 2,118.

"Many homes in Westminster are not lived in by families who are part of the local community, but are being used as just investments," said David Boothroyd, a Labour party Westminster councillor, who has analysed the figures. "Super-prime new property in Westminster is sold in Hong Kong and Dubai, not London, and then left empty – to be sold a few years later at a profit."

He said his experience on the council planning committee showed that "almost all the applications are for very large units that are not going to be anything any British family could afford".

A spokesman for the council said: "There has been an increase in residents of varying nationalities across London, some of whom may not wish to vote and therefore do not register."

The data comes as political concern grows about the so-called buy-to-leave phenomenon, which is thought to be driving up prices and locking UK citizens out of the housing market. Across the capital, there are 72,457 empty homes, of which 24,226 are classified as long-term empty, according to latest government figures.

Labour has pledged to block foreign investors from buying new homes in Britain until local people have been offered first refusal.

The Liberal Democrat communities minister, Stephen Williams, has announced a new empty-homes premium, which allows councils to remove the special tax subsidies being given to empty homes. And the free-market thinktank Civitas has proposed a ban on non-EU citizens buying existing homes.

Paul Palmer, director of Empty Homes UK, who used to work for Westminster council, has estimated that there are at least 740 empty properties in London worth £5m or more, the combined value of which would be enough to fund building more than 10,000 affordable homes.

"If you go there after dark, it is soulless," he said of the Westminster enclaves. "You have empty shells kept open by security guards and a couple of security lights. If these properties at the top of the market were made available at the right price, and people were able to move up into them, then the person on the next rung down would be able to step up and that would have a ripple effect all the way down the housing ladder

Harriet Harman rejects allegations of 1970s link to paedophile campaign

The Labour deputy leader, Harriet Harman, said 'the accusations of the Daily Mail are untrue and beneath contempt'. Photograph: Dave Thompson/PA

Harriet Harman has attacked the Daily Mail for launching a "politically-motivated smear campaign" against her and her husband, Jack Dromey, over claims they were linked to a paedophile campaign in the 1970s.

The Labour deputy leader condemned the "horrific allegations" and issued a point-by-point rebuttal on Monday, after the newspaper tried to link the couple and former Labour health secretary Patricia Hewitt to the now defunct Paedophile Information Exchange (PIE).

She said the newspaper was trying to make her "guilty by way of association", while Dromey said the allegations were "beneath contempt", especially as he had been at the "forefront of repeated public condemnations of the Paedophile Information Exchange and their despicable views".

Harman's forthright attack on the Daily Mail echoes Ed Miliband's decision to publicly address claims made by the newspaper about his family. The Labour leader clashed with the newspaper after a story last year branded his father, Ralph Miliband, who was a Marxist academic, as the "man who hated Britain".

The Labour deputy leader said in a statement: "This is not the first time the Daily Mail has made this horrible and untrue allegation.

"And, this is not the first time the Daily Mail has attacked me. The editor and proprietor of the Daily Mail are entitled to their political views and they are of course entitled to oppose what I stand for but they are not entitled to use their newspaper to smear me with innuendo because they disagree with me politically and hate my values."

In a series of articles, the Mail had accused Harman and Dromey of being apologists for child sex abuse, having a relaxed attitude to paedophilia and wanting to water down child pornography laws when they were officials at the National Council for Civil Liberties (NCCL), which at one point was affliated to the PIE.

After the Mail had called for the Labour leadership to speak out on the issue, Harman was strongly backed by Ed Miliband, who praised her "huge decency and integrity".

"I have known her for 20 years," he told Sky News on Monday. "I do not set any store by these allegations. I know she has a long and proud record of being on the right side of all of these issues."

The allegations date back to a time when Harman, Dromey and Hewitt worked at the NCCL, now known as Liberty, in the late 1970s.

The NCCL is reported to have granted affiliate status to the controversial PIE group, which was lobbying for paedophile rights, in 1975 and lobbied for the age of consent to be lowered to as young as 10. The Mail also accused Harman of signing an NCCL document suggesting ways to relax child pornography laws when she was legal officer for the group.

Harman attempted to rebut the allegations one by one. She said she supported the equalisation of the age of consent for gay and heterosexual sex, but never campaigned for the age of consent to be lowered to 10.

She also rejected the idea that she opposed the law on incest, saying the 1976 document referred to by the Mail was written before she started to work at the organisation.

On the allegation that she was seeking to water down a proposed ban on child pornography, Harman said the document she signed makes it clear that the NCCL "deplores the exploitation of children whether in the form of use in commercial pornography or as victims of sexual assaults".

It simply argued for amendments to stop parents being criminalised for taking pictures of their children on the beach or in the bath, the use of pictures in sex education being criminalised and the use of the word "obscene" instead of "indecent" as that could be considered too broad, including page 3 of the Sun.

She said anyone could apply to join the NCCL on payment of a fee and the PIE was just one of nearly 1,000 affiliated organisations.

In a separate statement, Dromey said: "Sexual abuse of children is evil and I have always viewed paedophiles and any group associated with them as evil. During my time on the NCCL executive, I was at the forefront of repeated public condemnations of PIE and their despicable views.

"Then, when I was elected chairman, I took them on. I personally chaired the NCCL conference that, on my recommendation, refused to back by a massive majority a loathsome motion from a leading light in PIE calling on NCCL to support the so-called 'rights' of paedophiles. Indeed, my stand was denounced in a leaflet distributed by PIE to the delegates to the conference."

He added: "As a lifelong opponent of evil men who abuse children, the accusations of the Daily Mail are untrue and beneath contempt."

Labour sources said Miliband had also thoroughly looked into the claims made by the Mail and "regards them as complete nonsense".

"There is a strong feeling in the party that this is a politically-motivated campaign by the Daily Mail," a senior source said. Hewitt has not commented.

Ukip accepts EU exit could take several years

Ukip leader, Nigel Farage, in Brussels. Britain's withdrawal from the EU could take years, says candidate Janice Atkinson. Photograph: François Lenoir/Reuters

Ukip will have to negotiate a withdrawal from the European Union over many years and the party still has to work out the details of how it would secure such an exit, a leading Ukip MEP candidate in May's European elections has conceded.

Janice Atkinson, who is number two on the party's candidate list in the South East England constituency, admitted it would be impossible just to walk away from the EU.

Her remarks at a public meeting in Brighton last week underline the extent to which key details of Ukip policy have yet to be developed.

Atkinson was also reluctant to give details on the party's policies on immigration and housing: "We have got policies but we're not releasing them just yet."

Polls suggest a tougher approach to immigration is one of Ukip's chief appeals, but the party says its position on existing migrants from the EU and other immigration matters is still being developed.

Asked if it would take as long as five years to leave the EU, Atkinson told the meeting: "You can't just literally walk away because we have got so many trade agreements." But she insisted that the EU could not stop the UK's withdrawal, saying there were various ways out including invoking article 51 of the EU treaty.

"We won't get into the nitty gritty of it … we can do it," she said. "It will take a few years' of negotiation to come out because we have got so many trade agreements and we have got to back out of those and we have to set up new trade agreements. At the moment, we are discussing how we will have this slow withdrawal – it won't just be a cut-off because there are jobs involved with EU trading with us … we are actually discussing internally how we try to handle that at the moment. We will have something to announce on that pretty soon."

Asked if it would take as long as five years she said: "You can't just literally walk away because we have got so many trade agreements." She added: "[Some] 70% of our laws come from this. We have got to unbind those laws as well".

Atkinson also admitted that Ukip MEPs would not turn up to vote in the European parliament. "Ukip MEPs are not elected to go there and vote," she said.

She added that the party's housing policies will be published before the European elections and will include a requirement that priority to social housing will go to people that have local connections, going back two generations.

At the same event, another prospective Ukip MEP Ray Finch said: "If it is was down to me, I would just send them a note saying 'we are off'." But, he added: "We have to be good neighbours – part of being good neighbours is negotiating a free and fair withdrawal from what the EU means. We could turn round and say to the EU 'we want this agreement with you on cross-border hospital treatment or whatever they have any idea on but it will come from our own people; it won't come from you, it will come from us'."

Finch said Ukip would make St George's Day a national holiday and that the British intelligentsia suffered from self hatred.

He cited George Orwell from his essays The Lion and The Unicorn claiming "the British intelligentsia is the only one in Europe that actively hates its own country". According to Finch: "Orwell was right then and he was right now."

He added: "So we have done bad things in our past; every country has. We have got these Caribbean countries asking for slavery reparation. Perhaps we should go over to Denmark and ask for reparations for the Vikings and from the Italians when the Romans came over. You just have to be proud about where you come from. It doesn't mean you dislike anyone else."

The Liberal Democrat president, Tim Farron, responding to Atkinson's remarks, said : "Finally, Ukip admit they are putting millions of British jobs at risk. Pulling out of the EU would be a disaster for Britain, wrecking the recovery and putting British jobs and businesses in jeopardy.

"Only the Liberal Democrats are standing up for British jobs and standing up to Ukip. That's why Nick Clegg challenged Nigel Farage to an in-out debate and it's why the Liberal Democrats are fighting to keep Britain in Europe."