The leader of NI21 Basil McCrea has insisted he did "nothing wrong" as it emerged he is facing an investigation into an allegation against him of inappropriate sexual conduct.

John McCallister, who formed the party last year with Mr McCrea to try to bring a fresh non-sectarian impetus to Northern Ireland politics, said it was "impossible" he could continue to work with Mr McCrea following the allegation.

He did not specifically call for his former close friend Mr McCrea to stand down, but that was implicit in his comments.

Mr McCallister said he was determined to stay in NI21 because he had a “duty to staff, members and supporters”. While NI21 supporters and candidates had hoped the news yesterday would have been how the party was faring in the counts for the North’s 11 new “super councils”, the focus instead was on a party that appeared to be imploding.

Performance at polls The allegation of "inappropriate activity" against Mr McCrea surfaced about an hour or so before the polls in the local and European elections closed on Thursday night. It came two days after the party redesignated itself from being a unionist party to the more neutral official Stormont label of "other".

The move prompted a serious rift in the party, which NI21 feared would affect the party’s performance in the European poll and local elections in which it was fielding 47 candidates. Those fears appear justified as the party seemed to be doing badly last night.

It prompted Tina McKenzie, a Belfast businesswoman from a Catholic background who was the NI21’s European election candidate, to resign from the party executive, with at least two other executive members also standing down. “I wish John and Basil sincere goodwill and hope they can work out their differences for the sake of the party,” said Ms McKenzie.

Mr McCrea confirmed yesterday he sent an email to senior NI21 members on Thursday informing them Mr McCallister was going to give an interview to the BBC's The View programme alleging the decision to redesignate "was an attempt to derail an investigation into inappropriate sexual activity by me". Mr McCrea, a Lagan Valley MLA , denied this unspecified allegation.

Mr McCallister, a South Down MLA and deputy leader of NI21, said “rumours” of the alleged inappropriate activity surfaced about three weeks ago. He said he raised them with Mr McCrea, who denied them.

Mr McCallister said he then felt obliged to “bring in outside professionals” – in this case an organisation called Carecall – to inquire into the matter.

Political differences Mr McCallister, who co-founded NI21 last June with Mr McCrea, acknowledged that for several months he has had serious political differences with his former close friend over how NI21 was being run, although they generally agreed on policy matters. However, he insisted he was not motivated by any personal issues with Mr McCrea in seeking an outside investigation.

The row has caused chaos within NI21 and has also disappointed supporters who were attracted by the party’s soft pro-union philosophy, where the concentration was on neither orange nor green, but on being “Northern Irish” first.

The row marks a huge personal estrangement between Mr McCrea (54) and Mr McCallister (42), who resigned from the Ulster Unionist Party, fearing it was taking a hardline direction, to set up NI21.

There is now a very big question over whether the party they formed can survive this political disaster.