Up to 500 Victorian Labor members could be kicked out of the party after a branch stacking investigation found hundreds did not pay for their own memberships.

It’s understood more than 200 will get the boot immediately after an investigation into the use of anonymous prepaid credit cards to pay for memberships found they did not pay their Labor Party dues.

Assistant state secretary Kosmos Samaras said the report would be released on Thursday and had identified up to 500 party members with questions to answer.

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Branch stacking involves the bulk recruiting of members at the local level in order to improve influence in preselection ballots.

The practise is technically legal under Australian law, although providing false information to the Australian Electorate Commission carries penalties.

Branch stacking can include paying a person’s party membership with or without their knowledge, or recruiting them on the proviso they vote in a specific way.

In October, Fairfax revealed the Labor Party was investigating its largest-ever branch stacking claim, and the party had moved a motion to ensure “that all party members can be confident in the acceptance of members, their renewal and a shared understanding around payments and eligibility”.

Fairfax reported the 500 irregular membership payments were closely linked with the plumbers’ union and Victorian members loyal to Bill Shorten and Stephen Conroy.

Hundreds of memberships were bought using the anonymous gift cards in May, 2013, including allegedly the membership of Plumbing Trades Employees Union organiser and Whittlesea councillor Norm Kelly.

Mr Kelly denied the allegation and said he had always paid his own membership.

The scam is alleged to have run for years.