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Warsi under pressure over expenses

Cabinet minister Baroness Warsi has come under mounting pressure amid allegations she claimed parliamentary expenses for accommodation while staying at a friend's house rent-free.

The Conservative Party co-chairman faced calls from Labour and a former sleaze watchdog for a full investigation into her expenses claims.

There was little sign of support from Downing Street or fellow ministers. Tory deputy chairman Michael Fallon said the peer "believes" she acted within the rules, but admitted that the controversy was embarrassing for the party.

Lady Warsi insisted she made an "appropriate payment" to her friend - Tory official Naweed Khan, who is now one of her aides - for the nights she stayed at the property in Acton, west London. Mr Khan supported her assertion, releasing a statement saying she made a payment each time she stayed.

But the property's owner, GP and former Conservative donor Wafik Moustafa, denied receiving any income from either Lady Warsi or Mr Khan.

The Tory peer, now a Cabinet Office minister, was claiming Lords subsistence of £165.50 a night at the time the allegations relate to, in 2008.

Sir Alistair Graham, a former chairman of the Committee on Standards in Public Life, said: "At the moment it all looks very muddy and blurred and worthy of a full investigation."

He suggested that if there was an investigation then Lady Warsi should relinquish her ministerial office until any inquiries were complete. "I personally am always of the view, when ministers face very serious allegations that seem to have some strength to them, then it's better that they stand down from their ministerial post while that investigation takes place, but of course that is a matter for the Prime Minister," he said.

Labour MP John Mann said he would be writing to the Lords standards commissioner requesting an investigation. "If you are paying no rent where you are staying, you can't possibly be claiming subsistence for staying there," he said.

In a further embarrassment for Lady Warsi, the most senior Muslim politician in Britain, she was forced to admit failing to declare rental income on a London flat in the Lords register of interests. She said the omission was due to an "oversight", adding that she had reported the letting of her Wembley flat in the Register of Ministers' Interests. The arrangement had also been declared to the Cabinet Office and HM Revenue and Customs, she said.

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