A Conservative MP accused of paying more than £100,000 of public money into his own company announced last night that he would stand down at the general election.
David Wilshire called the allegations "deeply hurtful and unjustified" and predicted he would be cleared by the Commons standards watchdog.
But in a brief statement, he said he had reluctantly decided it would not be "sensible" to seek re-election as the MP for Spelthorne.
Mr Wilshire, who has represented the Surrey constituency for 22 years, became the latest victim of the expenses scandal after talks with Patrick McLoughlin, the Tory Chief Whip.
He reportedly paid up to £3,250 a month in parliamentary office allowances between 2005 and 2008 to Moorlands Research Services, a company he set up with his partner, Ann Palmer. They were its sole owners until its closure last year.
Extra invoices were also submitted that brought the total paid to the firm over the period to £105,500. According to The Daily Telegraph, parliamentary officials did not check how the cash was spent and Mr Wilshire could not provide an expenditure breakdown.
Rules on parliamentary expenses forbid MPs from entering financial arrangements that "may give rise to an accusation" that they, or someone close to them, profited from taxpayers' money.
As Mr Wilshire's claims were made through office allowances, they have not been examined as part of Sir Thomas Legg's review of MPs' second-home expenses claims.
Mr Wilshire has strongly denied any wrongdoing, insisting the arrangement was formally approved by the Commons Fees Office. He also referred his own case to the Parliamentary Standards Commissioner, John Lyon.
Conservative sources had initially indicated they would wait for Mr Lyon's inquiry to conclude before deciding on Mr Wilshire's fate.
But that process could take months, and the Tory high command appears to have concluded that the continuing investigation would prove a harmful distraction in the run-up to the election expected in May.
Mr Wilshire, a former Tory whip, said: "The allegations made in today's Telegraph are deeply hurtful and unjustified. However, my constituents rightly want reassurance and the truth. This is why I have referred this to the Commissioner. I am confident that he will confirm that I have done nothing wrong.
"That said, I am very conscious that the allegations and investigation will cause great distress to my family and friends. These allegations also run the risk of harming my local party and our national party's chances of winning at the next general election.
"In the circumstances, I have reluctantly concluded that it is sensible for me not to seek re-election next year."
Until the allegations, the 66-year-old MP had been planning to defend his safe seat at the election. Mr Wilshire picked up more than half the votes cast in Spelthorne in 2005 to win it with a majority of almost 10,000 over Labour.
Mr Wilshire's main property is in Somerset and he designates a flat in Westminster as his second home for expenses purposes.
Last year, he claimed the full maximum permitted allowance for the flat's upkeep. He also received £6,000 in monthly payments of £66.66 for the "share of renewal of carpets/curtains every 10 years". He later said he was "sorry and embarrassed" by the claim but said the Fees Office suggested he submitted it in that way.Reuse content