Ukip Leader Nigel Farage "hired his wife and his former mistress" to work for him, a former MEP for the anti-EU party has said.
Ex-Ukip MEP Nikki Sinclaire said Farage paid the two women out of his EU allowances for working for the party.
Sinclaire made the claim during a debate in Brussels, telling the European assembly: "With unemployment still a problem across Europe and indeed the UK, does Mr Farage thinks it is a fair use of taxpayers' money, namely his secretarial allowance, not only to employ his wife Kirsten but his former mistress Annabelle Fuller?"
Farage declined to respond immediately in the assembly, saying: "I don't want to answer that at all, thank you."
Farage later said: "It's absolute nonsense. It's just a malicious attempt to do damage. Every single national newspaper has asked me that since 2006. The answer is the same."
The Ukip leader follows Fuller on Twitter and is one of fewer than 1,000 people getting updates from her on the social media website.
Ukip is eyeing big gains at May's EU and local elections, having built an image as a straight-talking party to challenge the big three.
Fuller, a press officer for Ukip, also denied the claims.
"I have been continually hounded by the press with these false allegations since 2006 including having journalists camp outside my house. It's a shame that as a woman I am considered fair game for accusations of alleged affairs.
"It's hard enough being a woman in politics without having to justify why I am employed. It is safe to say that this would not have happened if I was a man. Surely this is something that Nikki Sinclaire should have considered."
In today's Independent newspaper Farage said: "MEPs are given very generous allowances to conduct their work in Brussels and the UK. Ukip chooses to spend money to hire staff."