Nigel Farage has admitted he held talks about the possibility of returning as Reform UK's leader months before the 2024 general election, potentially undermining his own account of the circumstances in which he received a £5m gift from a crypto billionaire, reports infohub.kz.

At the weekend, it was reported that Farage had struck a deal with the party's then leader, Richard Tice, and the convicted fraudster George Cottrell to return to frontline politics. Farage has previously said he did not need to declare the £5m from Christopher Harborne or benefits in kind from Cottrell because he was not in politics at the time they were received. He has said he had no intention of returning to politics until June 2024, just before the election.

The House of Commons code of conduct states that new MPs must register all "registrable benefits" received in the 12 months before their election. At a press conference on Monday, Farage said: "I had no intention about returning to politics, or as leader of Reform, but in the spring of that year I did talk to Richard Tice about what the liabilities would be if … I was to come back to that position."

The Sunday Times reported Farage had negotiated the deal in March and April 2024, which was said to have involved Reform agreeing to repay or write off more than £1m in loans to Tice's company. "You would be a bit of a mug if you were to walk into a job and not find out what the potential liabilities were, and they were substantial," Farage said.

An inquiry by parliament's standards watchdog into whether Farage broke the rules by accepting the £5m and not declaring has been paused after he triggered a byelection by standing down as the MP for Clacton.

Bridget Phillipson, the Labour party chair, said: "Nigel Farage has blown a gaping hole in his excuse for why his secret £5m 'gift' from a crypto billionaire did not need to be declared. Farage has desperately tried to distract from his catalogue of scandals. But the embattled Reform leader has run out of road and must come clean with the public. If he had done nothing wrong, he surely would have explained himself by now. With grubby pacts, police probes, and support from a convicted fraudster – Reform are up to their neck in sleaze and they clearly think the rules don't apply to them."