Richard Desmond is seeking £200 million in damages over “numerous manifest errors” he claims the gambling regulator made during a bitter and prolonged bidding war that ended when the commission named the Czech-owned operator Allwyn as the winner.

The multimillionaire, who gave £1m to the UK Independence party (Ukip) in the run-up to the Brexit referendum, will rely partly on EU laws retained after the UK’s exit from the single-market bloc to argue the case, it has been revealed.

The Gambling Commission is understood to have delivered a scathing assessment of Desmond’s proposals, declaring the bid “fanciful” because it scored considerably lower on essential criteria than plans lodged by Allwyn and Camelot.

The regulator argued that Desmond’s proposal scored lower in categories such as the amount of money that would be devoted to good causes and the overall business plan.

The total score would have been 57.5 per cent, compared with Camelot’s score of 85.7 per cent and Allwyn – the eventual winner – on 87.2 per cent.

A spokesperson for Northern & Shell said the company was bringing the claim “because it believes there are serious public interest questions to be answered as to how the lottery contract was awarded. As an aggrieved bidder, it has been advised that it is entitled to seek full damages.”

They said the action was “rooted in a commitment to transparency and fairness” and questioned the regulator’s dismissal of the bid as fanciful.

The spokesperson from Northern & Shell added: “The bid was supported by substantial financing from leading financial institutions, including HSBC, Barclays, and Société Générale, underscoring its seriousness.

“Northern & Shell’s action aims to uphold transparency and ensure the process is fair and honest, which is wholly in the public interest. Speculative reports on damages are outside our purview for comment.”

By Jack Peat