Former senior Ukip MEP Amjad Bashir has defected to the Tories, claiming Nigel Farage's party had "outlived its usefulness".
Prime Minister David Cameron said he was "absolutely delighted" at the Yorkshire and Humber MEP's decision, news of which emerged shortly after Ukip announced it had suspended Mr Bashir on suspicion of "grave" impropriety.
Mr Farage, who will be questioned about the defection in a major television interview, said: "Ukip has suspended Amjad Bashir MEP pending further investigations into unanswered financial and employment questions."
Mr Bashir, who was Ukip's communities spokesman, dismissed his former party's move as a "desperate attempt" to smear him to distract from the news of his decision to join the Conservatives and insisted there was "not a shred of truth" to the claims.
A Ukip source said Mr Bashir had been aware for some time that he was being investigated and suggested that the imminent suspension was the reason for his defection.
"He knew he would be receiving that letter," the source said.
The MEP said he met Mr Cameron yesterday and applied to join the Tories.
Mr Bashir had been told he was facing investigations over allegations including interference with Ukip candidate selection processes.
A Ukip spokesman said yesterday: "The UK Independence Party has a zero-tolerance policy and takes the matters at hand extremely seriously.
"The allegations against Mr Bashir are of a grave nature and we will be forwarding our evidence obtained so far to the police.
"Ukip will not tolerate anyone abusing their positions in the party, as we have a firm commitment to differing ourselves from the existing political classes.
"As a result, Mr Bashir's involvement with the party was suspended today with immediate effect pending further investigations."
But Mr Bashir said Ukip's reaction when the party found out he intended to defect "sums up what is wrong with them".
"They made a crude attempt to smear me with false allegations of irregularities in the recruitment of Asian members in Bradford," he said
"There is not a shred of truth in any of the claims but it has made me more convinced than ever that I made the right decision."
Writing in the Mail on Sunday Mr Bashir said he had "experienced racism in Ukip" and claimed the party had "outlived its usefulness" because the Tories had promised a referendum on membership of the European Union.
He claimed Mr Farage "runs the party like a dictator" and "gets rid of anybody who stands in his way".
He said: "I have decided to leave Ukip because it has become a vanity project for Nigel Farage and because many of the criticisms made of the party are true. David Cameron famously said that Ukip was a party of 'fruitcakes, loonies and closet racists'.
"Certainly, I have experienced racism in Ukip. I have been racially abused on social media by other Ukip members who ask offensive questions like: 'Are you a Muslim?'
"I was angry when I was the only Ukip politician who was cut out of a video of speeches at a party event. I complained that it was because of my ethnic minority background, but was fobbed off."
He hit out at the "appalling" and "childish" antics of Ukip MEPs in the European Parliament, and condemned Mr Farage's remarks in the wake of the Charlie Hebdo terror attacks in Paris.
"I was outraged when I heard Mr Farage talk of a 'fifth column' of immigrants in Britain," he said.
"I have worked hard all my life, and when my father came to this country he worked his socks off to provide for his family. It is an insult for him to talk in this way."
Mr Farage will appear on BBC1's Andrew Marr Show for a major interview, which looks set to be dominated by questions on Mr Bashir and comments made by party secretary Matthew Richardson about the NHS and Ukip providing representation for "hundreds of thousands of bigots".
Mr Cameron welcomed Mr Bashir's defection, but indicated he understood why some people had been tempted by Mr Farage's party.
"I understand why some people have drifted away to Ukip," Mr Cameron told the Sunday Telegraph.
"I want to genuinely win those people back by saying look, we are the only party that can offer the strong immigration control this country needs; we are the only party that can deliver that referendum that the British people deserve.
"And crucially, this general election is not a by-election, it's not a beauty contest, it is not a chance to send a message or make a statement, it is about choosing a government of the United Kingdom."
Mr Cameron said: "I'm absolutely delighted that Amjad has decided to leave Ukip and join the Conservative Party."
Mr Bashir, who is a Muslim from a Pakistani background, had an "inspiring" story, Mr Cameron said.
He added: "It's another sign that in this great country of ours you can come to Britain without very much and you can be a member of the European Parliament, an MP, sit in the Cabinet."
Labour's Jon Trickett, the shadow minister without portfolio, said: "This latest defection shows more than ever there is a revolving door between Ukip and the Tories.
"Conservative MPs defect to Ukip and Ukip MEPs flee back the other way when Nigel Farage says they have questions to answer.
"Ukip and Tories share policies as well as people - both parties want to increase NHS privatisation and cut taxes for those at the very top. All that's clear is that neither party can be trusted to stand up for hardworking families."
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