The party which took third place at the city's most recent by-election has been branded right wing... by the BNP.
Anna Seymour, of the England First Party, (EFP) says she quit the BNP in 2003 and was unaware one of her campaigners, Barry Taylor, was still a member when she took eight per cent of the votes last Thursday.
The revelations emerged following an investigation by self-proclaimed anti-Fascist organisation Searchlight which suggested some of the team were attempting to 'hide behind a flag of inconvenience'.
The EFP took 221 votes, finishing ahead of the Lib Dems and UKIP in Whaddon ward.
The south-east regional organiser for the BNP, Roger Robertson, confirmed that Mr Taylor was dismissed when the party found out about his actions with the rival organisation.
Mr Robertson said: "Barry Taylor faced disciplinary action and has been dismissed for his actions. We found out at the time that he was assisting and as a consequence his membership was withdrawn immediately."
Insisting that Mrs Seymour only ended her membership with the BNP a year ago, he added: "We were disappointed that she left and she didn't run as a candidate for our party."
National spokesman for the BNP, Dr Philip Edwards, said BNP members are not allowed to campaign for the EFP.
He said: "We don't approve of the EFP, they have extreme views that are not appropriate for our development."
Mrs Seymour, who is married to a black American and has two mixed-race children, said she was delighted by her shock result and claimed she left the BNP because of its racism.
She said: "I must congratulate my campaign team - without them it wouldn't have happened.
I left the BNP because they were very racist.
"I wasn't aware that Barry was still a member of the BNP. He's a very good friend of mine so I would have had him on my team even if I had known.
"It's none of my business which party my campaigners belong to, we don't ask them." Mr Taylor, who ran a website on behalf of Luton BNP supporters, refused to comment.
Cllr Camilla Turnbull, who won the by-election with 1,108 votes, said: "Everyone should be upfront about their history, particularly Anna Seymour in this case.
"We were aware of the EFP's background but I was just happy with the overall result."