Tory EU leader quits over breach of rules on expenses

Giles Chichester resigned yesterday as leader of the Tory group in the European Parliament after breaking rules on expenses, and is now under pressure to stand down as an MEP.

Mr Chichester admitted paying thousands of pounds in staff allowances to a firm of which he is a paid director, but said he made a "technical" breach of the rules and had acted "in good faith".

He stood down after David Cameron intervened by demanding that he produce a full statement of his expenses by today. The Tory leader pressed the MEP to justify his actions after it emerged that his family firm – founded by his late father, the yachtsman Sir Francis Chichester, to publish maps – had received £445,000 since 1996 from the EU "in connection with secretarial and assistant services for the European Parliament, constituency and committee work".

Mr Cameron, who is anxious to prevent a return of the "Tory sleaze" label which stuck to John Major's government, said: "Giles Chichester is right to stand down as leader of our MEPs to prepare a full explanation of how his office is funded. Just as I expect our MPs to adhere to the highest standards, so must our MEPs. The tax-paying public have a right to know how their money is being spent and politicians have a duty to ensure it is spent properly."

The issue is now in the hands of the European Parliament, to whom Mr Chichester says he submitted his accounts 18 months ago and has since heard nothing. If he is criticised by the parliament, Mr Cameron may decide to withdraw the Tory whip.