French judges have blocked a £2m state subsidy payment to the far-right party of Marine Le Pen amid an ongoing investigation into whether funds for European Parliament assistants were misused.

Ms Le Pen, the head of the National Rally party – formerly known as the National Front – said she would appeal against the decision to withhold the cash, which she described as a “death sentence” for the group.

“The judges’ decision is a real coup d’etat,” Le Pen said, going on to accuse them of harbouring political motivations.

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The allocation of the €2.35m subsidy, nearly half of the party’s expected subsidy payments this year, was due to be paid on Monday but was frozen due to the alleged fraudulent use of European parliamentary funds by the anti-immigration party.

It is accused of redirecting more than €7m in funds meant for European Parliament assistants to people working for the party domestically.

The European Parliament believes the money was instead paid to staff in France by Ms Le Pen and other MEPs from her party, including her father, Jean-Marie Le Pen, the founder of the National Front.

“The investigating judges are applying a death sentence by confiscating our public grant without a court judgement,” Ms Le Pen said, in an interview with BFMTV where she replied “No, no, 10 times no,” when asked whether she had indeed used European funds to pay for assistants who worked for her party.

“Our assistants, like our MEPs, work against the European Union because it harms our citizens … and that’s what they can’t stand!”

Without the money, she said her party “will be dead by August”.

In a statement on Sunday she said that the subsidy was essential for the party to meet its running costs such as salaries and rent.

She said the withholding of funds was illegal as it came during an investigation and therefore didn’t respect the presumption of innocence.

All French parties are entitled to money in proportion to the number of votes it receives.

The party, which recently changed its name from National Front to National Rally in an attempt to distance itself from racist and antisemitic associations, has long suffered from financial problems.

In 2014 it took a loan from a Russian bank, saying it had been refused credit in France. Several banks, including France’s Société Générale and HSBC, refused to open accounts for the party last year.

Ten people have been charged so far over the alleged misuse of funds, including Ms Le Pen, who reached the second round of France’s presidential election last year before being defeated by Emmanuel Macron.

She and seven other National Front candidates subsequently won parliamentary seats.

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