Berlin - Germany's far-right National Democratic Party (NPD) lost on Tuesday a legal appeal against a stinging fine for abuse of the government subsidies which are granted to all German political parties in proportion to their votes and fund-raising.

The fine, of 870,000 euros, was deducted last year by federal parliamentary officials from the annual grant to the anti-foreigner NPD, which has seats in two of the 16 German states but no representation at federal level.

Judges of the Berlin administrative tribunal upheld the penalty, agreeing that the party had filed false accounts from 1997 to 1999, inserting income from fictitious donations. This meant most of the government subsidies for those years were void.

Parliamentary counsel Christian Kirchberg said further audits of the NPD's regional chapters would follow.

Mainstream parties have calling for the NPD to be closed down, charging that it is neo-Nazi, though the NPD denies this. The German constitution bars anti-democratic parties from legal existence.

The NPD general secretary, Peter Marx, accused the government of trying to bankrupt the party by audits.

All Germany's political parties have only modest fund-raising capacities and instead receive large sums from government funds to pay staff and fund campaigning. They argue that neutral subsidies prevent them becoming beholden to rich donors.

The NPD cheated on the formula by booking campaign work by its members in Thuringia state, such as leafleting and photocopying, as equivalent to cash donations. The tribunal condemned this, saying the members of other parties did such work without any reward. (dpa)