By Matt Siegel

SYDNEY (Reuters) - The Australian Sex Party, a tiny party known for its salacious name and election day antics, said on Thursday that it had been deregistered after the country's election watchdog ruled it did not have enough activists.

Co-founder Robbie Swan said in a statement that the party would "vigorously" appeal a decision handed down by the Australian Election Commission (AEC) that removed its official status following a review of its membership.

Under Australian law a political party must have either an elected representative in the federal parliament or 500 members to keep its registration. The Sex Party has one lawmaker in the Victoria state legislature, but none at federal level.

Swan rejected the AEC's finding that it had fallen below the 500-member threshold.

The Sex Party is primarily comprised of young people who change addresses frequently, do not have home phone numbers and are much more transient than traditional party voters, Swan said.

"They are gaming the system against minor parties," he said on the group's website.

The Australian Sex Party was registered in 2009. It had its roots in the adult entertainment industry lobby group Eros Foundation, the Sydney Morning Herald newspaper reported.

The group is well known for its energetic performance on election day, where its presence at some inner-city polling stations in Sydney and Melbourne often seem to match those of the major parties.

Young activists sporting shirts emblazoned with cheeky slogans such as "The Australian Sex Party: where you come first" or "We're serious about sex", are known to follow voters for entire city blocks in a bid to secure their vote.

Following the ruling, the Sex Party will still be able to field candidates but will not be able to put its name on ballot papers or receive federal funding available to registered parties.

(Reporting by Matt Siegel; Editing by Alex Richardson)