The anti-Brexit campaigner Gina Miller has said “we don’t have a functioning democracy” if new political parties cannot access banking services, after she was told her own party’s account would be closed.

The government and financial services watchdog must step in, she said, to ensure new parties and MPs can access banking to be able to operate.

Miller said it was a “bigger issue” than the closure of Nigel Farage’s bank account, which led to a row resulting in the resignations of the top bosses at NatWest and Coutts.

Miller, who came to prominence bringing legal cases over Brexit, was told earlier this month by Monzo that her True and Fair party’s account would close in September.

She was told in a message on the bank’s app but was given no explanation.

Monzo has since said it does not accept any political parties and that the account was opened erroneously as it was not categorised as such in the application.

Nine banks had turned down the True and Fair party before it got the account with Monzo in November 2021, according to Miller.

She told the PA news agency: “That is the bigger issue, the fact that as a new insurgent political party you have no access to banking services, which is extraordinary in a democracy.”

The party has now found a small institution to bank with but, Miller says: “What if they turn around in future and say: ‘Well, actually, we’ve decided for no reason that because you’re a political party, you can’t have a bank account’?

“I think the government and the FCA [Financial Conduct Authority] have got to step in straight away because if this happened – we lose our account in September for Monzo, and then another bank or our new provider decides that they will use this same rule saying: ‘Oh well, we don’t accept political parties’ – then we in effect won’t exist.

“We wouldn’t be able to operate because we wouldn’t have any access to any banking services.”

Concerns over de-banking have mounted after Farage said his account with Coutts was shut down because it disagreed with his political views.

The prime minister, Rishi Sunak, weighed in to say his government was taking “tough action” to protect the free speech of banking customers.

The NatWest chief executive, Dame Alison Rose, stepped down this week after both Downing Street and the Treasury expressed their “serious concerns” about her conduct after she admitted to being the source of an incorrect BBC report on the former Ukip leader’s finances.

Miller noted that Farage had been offered an alternative account with NatWest and said her case pointed to wider issues.

“What I’m saying is actually even bigger than that, which is: how can we have a proper functioning democracy if we can’t have new parties or new elected people?”

She also raised concerns about newly elected MPs being de-banked due to lenders using rules around politically exposed persons (PEP) in a “dysfunctional way”.

Her True and Fair party is standing nine candidates in the next general election, with Miller running against the Tory former minister Chris Grayling in Epsom and Ewell.

The financial regulator is looking into whether PEP rules, over anyone considered to be higher risk because of their political connections, are applied too rigorously by banks amid concerns many British politicians are denied accounts.

Monzo said: “Like lots of banks, we do not accept any political parties as Monzo Business customers, in the same way that we don’t currently accept trusts, clubs and a range of other organisations.

“In this case, the account wasn’t originally categorised as a political party.

“After this was identified and corrected, the customer was given notice that the account would be closed. We recognise that this experience will have been frustrating for the customer and we’re sorry for that.”

There is no suggestion Monzo factored Miller’s political views into its decision.