WIRRAL South MP Ben Chapman insisted he was “open and above board” over £15,000 claimed from the taxpayer for mortgage interest he no longer paid.
Mr Chapman became the latest MP to become caught up in the row over expenses when his details were revealed in The Daily Telegraph.
It said he sought and was given permission to reclaim the interest payments on the full value of his original mortgage, despite paying off £295,000 of the loan in 2002.
He benefited by £15,000 over 10 months from the arrangement, which documents suggested was not unique to him, the newspaper said.
Mr Chapman said: “I do not believe I have done anything wrong.
“I am very distressed about what has happened.
“Whatever I’ve done, I’ve been entirely open and above board with the authorities and Parliament.
“I’m now going in to discuss it with them and see what the situation is.
“But I don’t want to comment further because I haven’t seen the papers.”
Downing Street has confirmed an inquiry will be held into Mr Chapman’s claim he was given the go-ahead to claim by the Fees Office, which scrutinises MPs expenses and perks.
The move will open up further allegations that some MPs caught up in the Parliamentary expenses scandal were wrongly advised by officials.
Mr Chapman, a former high-flying diplomat who has held the Wirral South seat since a 1997 by-election, insisted: “I have been transparent throughout.”
He said he was covered by an agreement with officials, who permitted the arrangement to continue because by paying off the home loan, he was losing investment opportunities elsewhere.
Mr Chapman has sent all relevant documents, including correspondence believed to vindicate him, to Chief Whip Nick Brown following a conversation with the Government’s “enforcer”.