Baroness Warsi, co-chairman of the Conservative Party, has admitted failing to declare rental income received for more than a year on a north London flat.
The cabinet minister said she took "full responsibility" for not telling House of Lords authorities that she was renting out a flat near Wembley. She moved into central London after the 2010 election on the advice of security experts.
Baroness Warsi said she had informed the Cabinet Office and HM Revenue & Customs that she was renting the flat out, which is particularly embarrassing as the Cabinet Office is responsible for government transparency.
She said: "Due to an oversight, for which I take full responsibility, the flat was not included on the Register of Lords' Interests when its value and the rent received came to exceed the thresholds for disclosure. When the discrepancy became apparent this week, I immediately informed the Registrar of Lords' Interests of its omission."
Peers must declare income or benefits totalling more than £500 a year but do not have to give an amount. In a statement, she added: "At all times, my ownership of the flat and the fact that it was being let out was fully disclosed to Cabinet Office officials and HMRC, and was appropriately reported on the register of ministers' interests held by the Government." But the information was not made public by the Cabinet Office.