Prime Minister Rishi Sunak has asked an independent ethics adviser to question the tax affairs of Conservative Party chairman Nadhim Zahawi.
Mr Sunak said Mr Zahawi will continue in his job while the inquiry is conducted.
Ethics adviser Sir Laurie Magnus has been brought in to probe the multi million pound settlement with HMRC.
Mr Zahawi – who faces calls to stand down – said:
“I am confident I acted properly throughout and look forward to answering any and all specific questions in a formal setting to Sir Laurie.”
Mr Zahawi admitted he had made a “careless and not deliberate” error on his tax returns.
Mr Sunak announced the investigation during a visit to a hospital in Northamptonshire.
He said:
“Integrity and accountability is really important to me and clearly in this case there are questions that need answering.
‘That’s why I’ve asked our independent adviser to get to the bottom of everything, to investigate the matter fully and establish all the facts and provide advice to me on Nadhim Zahawi’s compliance with the ministerial code.
“I’m pleased that Nadhim Zahawi has agreed with that approach and has agreed to fully co-operate with that investigation.
“As is longstanding practice, he will continue to play the role he does.”
In a statement, Mr Zahawi said:
“I welcome the Prime Minister’s referral of this matter to the independent adviser on ministerial standards.
“I look forward to explaining the facts of this issue to Sir Laurie Magnus and his team.
“I am confident I acted properly throughout and look forward to answering any and all specific questions in a formal setting to Sir Laurie.
“In order to ensure the independence of this process, you will understand that it would be inappropriate to discuss this issue any further, as I continue my duties as chairman of the Conservative and Unionist Party.”
Labour claims former Chancellor Zahawi’s position is “totally untenable”.
