A secretive think tank has lost a two-year legal battle over suggestions that it is a “hard-right lobby group”.

The Institute of Economic Affairs (IEA) had complained to the UK’s broadcasting regulator, Ofcom, about an interview between LBC presenter James O’Brien and openDemocracy’s Peter Geoghegan in 2019.

The IEA - which does not declare its donors - claimed it was inaccurate and misleading to describe it as a “lobby group”, and that its representatives were “not actors of good faith” or “proper experts”.

But Ofcom cleared LBC of any wrongdoing, saying that “the comments made about the IEA… did not result in unfairness to the IEA”.

It added that some of the comments made by O’Brien and Geoghegan had been made about think tanks in general, rather than specifically about the IEA.

Introducing the 2019 interview, O’Brien said: “You have to conclude when you look at outfits like the Taxpayers Alliance, or the Institute of Economic Affairs, that until they reveal their financial backers, you just have to presume that everything they do is on the say so of the financial backers that they refuse to reveal.”

He added: “75% to 80% of my profession, the British media, has fallen into the trap of treating these people like good faith actors, you won’t hear it reported anywhere else except here and of course on the website Peter works for: openDemocracy.”

During the interview, Geoghegan explained that the IEA’s funders were kept anonymous, while its association with Conservative politicians at an event “might make it look as if the think tank was politically biased”.

He added: “We don’t know specifically who funds this work and in the absence of that you can’t know who’s motivating the work.”

The radio discussion had come after openDemocracy had revealed new details about the close connections between senior Conservatives and the IEA.

Emails showed that staff at the think tank had easy access to government ministers, while a senior IEA figure had personally arranged for the then Brexit minister to meet with interest groups. At the time, the IEA had privately said it was involved in “the Brexit influencing game”.

The IEA keeps its funders anonymous, but previous reports say that it has taken money from gambling and tobacco companies.

In 2018, openDemocracy revealed that a free magazine for A-Level students produced by the IEA included articles arguing climate change science and in favour of NHS privatisation - without revealing who funds the organisation.

Last year, openDemocracy found that one of the IEA’s own advisors had accused it of being “a provocative attention seeker” masquerading as a charity to act as a lobbying outfit.

In its complaint to Ofcom, the IEA said it had not been offered a right to respond to the allegations. But, during the discussion itself, O’Brien said: “I will be happy to offer a full right of reply to anybody who has just been mentioned. As long as they tell me who funds them.”

Outlining its judgement about the LBC broadcast, Ofcom said: “Given the IEA’s reported activities in influencing the debate around Brexit, there were questions that the presenter considered should be answered regarding the IEA’s funders, and further, there were concerns that the public was unable to access information as to who might be influencing the IEA’s work (as well as the work of other organisations referred to), until their funders were revealed.”

The IEA had also complained that Geoghegan had described it as an organisation of “questionable provenance, with dubious ideas and validity”.

But Ofcom said the comment was “made in the context of a discussion about the apparent lack of transparency in the funding of organisations who contribute towards policy discussions,” rather than a “specific claim against the IEA”.

“We considered that the inclusion in the programme of the comments complained of did not result in unfairness to the IEA,” it said.

As a registered education charity, the IEA is not permitted to campaign on political issues outside of its mission statement. But the Charity Commission issued it a formal legal warning in 2019, for allegedly using resources to campaign for a hard Brexit. The warning was later withdrawn “in light of steps the charity has taken since the breach”.

At the time, a spokesperson for the Commission said: “A report published by the charity in September 2018 crossed the line and represented a breach of charity law.” They added: “The charity has made commitments to cooperate with us, and we welcome that.”

The IEA's chief operating officer, Andy Mayer, described Ofcom's decision as "deeply disappointing" and "inadequate", adding that the IEA "will consider next steps".