The businessman and Reform UK donor Arron Banks is facing calls to lay out the extent of his surveillance of journalists, described by an industry body as an “attack on our democracy”.

The News Media Association (NMA), which represents regional and national media, raised concerns after Banks appeared to admit over the weekend to hiring private investigators to spy on a Sunday Times journalist.

The revelation, first reported in the New Statesman, has led to fears that other journalists examining the funding of Reform and Nigel Farage, including those at the Guardian, could have been targeted.

When asked over the weekend whether he had commissioned investigators to surveil reporters at the Guardian, Banks said he was “not really interested in the Guardian” but declined to comment further.

The Guardian, along with the Sunday Times, has broken a series of stories in recent months revealing how cash has been given to Reform and Farage personally from donors and wealthy benefactors.

Theo Bamber, the chief executive of the NMA, said aggressive attempts to deter journalistic inquiry were at risk of becoming normalised.

He said: “Using private investigators to try to deter journalists from making legitimate inquiries about public figures is an attack on our democracy. Sadly, intimidation and abuse of local and national journalists is increasingly used as a weapon to limit scrutiny and deflect attention away from matters of public interest. This must not become normalised.

“Ministers must wake up to this threat to our democracy and do much more to protect the independent journalism which underpins our democratic way of life.”

According to the New Statesman, Banks instructed Precision Risk and Intelligence, a private investigations company he once owned, to examine Gabriel Pogrund, the editor of the Sunday Times’ Insight investigations team.

In response to inquiries, Banks told the magazine: “We believe the Sunday Times used hacked information and that was an area of interest. We do have an investigative arm that’s got advanced capabilities.”

The Sunday Times has strongly rejected Banks’s suggestion.

Banks, when asked directly by the New Statesman whether he had paid investigators to look into Pogrund, responded: “When you live by the sword, you die by the sword.”

Jemimah Steinfeld, the chief executive of Index on Censorship, said Banks should be open and transparent about the extent of his surveillance of journalists.

She said: “I really, really hope that it’s not happening to other journalists. But my fear is that it will be, because Gabriel is not the only one who’s asking the right questions about Reform.

“These tactics are often used to just stop the questions, to stop accountability, and that can have hugely detrimental effects on our democratic structure.”

Reform UK has denied any knowledge of Banks’s alleged use of investigators.

Gawain Towler, a member of Reform’s board and a former head of press for Ukip, said he was uncomfortable with the development but there were legitimate questions as to where journalists were sourcing private information.

“Personally I don’t like it,” he said. “But truly how in the light of the situation does one ask questions with a possibility of getting an answer …

“I think the issue with Banks is that there was actually silence about this possible collusion with the [National Crime Agency and journalists] … It would be ridiculous of us not to ask questions. So how do you ask questions?”

Nicky Morgan, a former Conservative secretary of state for culture, media and sport, said such intrusions in press freedom were “not compatible with an open democracy”. She said: “Investigating a journalist can only be intended to have a chilling effect on free speech.”

Lisa Smart, the Liberal Democrats’ Cabinet Office spokesperson said: “Hiring private investigators to target journalists who are simply doing their jobs is a desperate attempt to dodge accountability.

“Anyone who uses or condones these tactics demonstrates complete contempt for a free press and should have no business in British public life.”

Banks, who helped run the pro-Brexit campaign group Leave.EU, is reported to have previously hired what he described as “ex-MI5 and SAS” operatives to surveil political opponents in the run-up to the EU referendum.

Included among those was Matthew Elliott, a Conservative peer who was the chief executive of the rival Vote Leave campaign. He has warned that such tactics will “drive out the decent people we need in public life”.