Party to field 450 fewer candidates than in 2007 as leader Nick Griffin comes under pressure over organisation's finances.
The British National party is facing political meltdown in next month's local elections after a string of defections and growing concern over its finances.
Dozens of prominent BNP figures have either been suspended or have resigned and in the past few weeks several former members have announced they are to stand for rival far-right and nationalist organisations.
The BNP is standing around 250 candidates in next month's elections, compared with approximately 700 in the equivalent polls in 2007.
The turmoil comes as the Electoral Commission announced this week that the party had "failed to comply with the legal requirement to keep adequate financial records" for the second year running, further increasing the pressure on the BNP leader, Nick Griffin, who fought off a leadership challenge last year.
"The position of the party is extremely dire," said Professor Matthew Goodwin, from Nottingham University, an expert on far-right politics. "The defections and rebellions are going strong and we have seen a whole host of key figures leave to join other far-right groups … Nick Griffin is becoming increasingly isolated."
The BNP says it is focusing on the elections to the Welsh assembly, where it claims it could secure two seats, but anti-Griffin rebels say the BNP should be making more progress in England as cuts bite and economic instability increases.
"There is growing anger within the party because there was a period when it looked like Nick Griffin may have been able to force the BNP into the political mainstream," said a spokesman for the anti-racist campaign Hope not Hate. "But it is clear Nick Griffin will himself be the BNP's nemesis. His mismanagement, arrogance and dictatorial leadership have dragged his own party off a political cliff."
The BNP's election prospects took a blow earlier this month when it emerged that around 15 former members, including some key figures such as former Yorkshire organiser Chris Beverley, had defected and are standing for the English Democrats in next month's elections. On his blog Beverley said it had been a "huge decision" and blamed the actions of Griffin and his leadership team for the party's problems.
Goodwin said: "There are just over 200 BNP candidates but there are 390 far-right candidates in total so what we are seeing quite clearly is that the far right is splintering, not just among one or two parties but among a whole host of groups and factions … it is the classic case of far-right parties in the UK shooting themselves in the foot."
Analysts say BNP infighting has allowed other far-right and nationalist groups to come to the fore. Organisations such as the English Defence League, the English Democrats and the British Freedom party are now challenging the BNP, but perhaps its biggest threat is a resurgent UK Independence party, which beat both the Conservatives and Lib Dems to come second in a byelection in Barnsley last month.
"The activists that are frustrated with the incompetence of the BNP are going to the EDL or other rightwing factions and many [former voters] are going to Ukip if they want something more respectable," said Goodwin. "The BNP are being outflanked on all sides."
Opponents say the defections and wider splits mean the party is struggling to stand candidates in some of its core areas.
BNP spokesman Simon Darby dismissed the defections, saying: "People have gone, that is it … but wait and see about that, I think they are going to regret that, just wait and see."
He defended Griffin, insisting he was still a popular leader and that it was "a miracle" the party was still operating following what he said was a relentless campaign to undermine it by the media and the state. "I am just pleased we are still here putting up a campaign in seats we may win … we are still in the game and are looking to regroup after all the dust has settled on this election," he said.
Griffin has come under growing pressure since the BNP's poor showing in last year's general and council elections, when it lost all but two of the 28 councillors up for re-election and was wiped out in its east London stronghold of Barking and Dagenham. It now has 23 councillors, compared with 54 a year ago, and several senior figures, including election co-ordinator Eddie Butler and London assembly member Richard Barnbrook, have come out against Griffin.
The rebels' anger is focused on Griffin's leadership style and concern about the party's debts which were exacerbated this week when the Electoral Commission said the BNP had failed to keep adequate financial records for the second year running.
"We have sought an urgent meeting with the party to discuss the steps they need to take to comply with the law," said a spokesman for the commission.
The party is reportedly £500,000 in debt although Darby said that the figure was "coming down".
"We are making good progress on that, that debt will be serviced," he added.
Although a poor showing in next month's elections would increase the pressure on Griffin to stand down, Goodwin said that remains unlikely.
"Griffin will hang on because the BNP constitution means it is almost impossible to oust him... [He] is doing the party in, it is not connecting with voters, they are running out of money but he is not going to go anywhere... they truly are a fading star and it is almost entirely because of Griffin's incompetence."
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