Conservative party co-chairman Sayeeda Warsi faces a formal investigation by the House of Lords' commissioner for standards over her expenses claims.
Paul Kernaghan, a former police chief, will assess whether Baroness Warsi was wrong to have claimed up to up to £165.50 a night for a six-week period in 2008 - when she was allegedly staying rent-free.
Labour had referred the matter to the police but the Metropolitan police said it had established it need not concern itself with the allegations.
As a result the matter has been referred to Mr Kernaghan, a spokesman explained.
Wafik Moustafa, the former Tory donor who Baroness Warsi was staying with when she claimed expenses, told politics.co.uk last week that the first he had heard of the claims was when the story broke in the papers.
"She is trying to save her skin by any means," he commented.
Hunt and Warsi 'different cases'
The referral over her expenses claims follows a separate investigation by the independent adviser on ministerial behaviour, Sir Alex Allan, ordered by David Cameron.
The prime minister has been criticised by Labour for failing to refer culture secretary Jeremy Hunt to Sir Alex over his conduct in News Corp's takeover bid of BSkyB.
That decision was cast in a new light when he referred Baroness Warsi, after it emerged she had taken a business partner with her on an official trip to Pakistan shortly after the 2010 general election.
Baroness Warsi said Abid Hussain, the second cousin of her husband, was also a director of a company called Rupert's Recipes which the Tory party co-chairman had an interest in.
Critics have drawn attention to the parallels in the case with lobbyist Adam Werritty's overseas trips with former defence secretary Liam Fox, who paid for the inappropriate link with his job.
Baroness Warsi's defenders have pointed out that Mr Hussain was not part of the official delegation on the Pakistani trip, however.
Justice secretary Kenneth Clarke told the PM programme yesterday that he was "astonished" at the "pedantic" nature of the claims being made against the Tory co-chairman.
"It does become sometimes a bit of a lynch mob, racing about finding extraordinary things to complain about," he commented.
"Some of the ones against Sayeeda were downright silly – that she had failed to report twice in two separate places something which she had been perfectly open about."
Outspoken Conservative backbencher Nadine Dorries told the Financial Times newspaper that Baroness Warsi ought to resign, however.
"She is probably completely innocent, but she should step aside while the investigation takes place," she said.
Shadow Cabinet Office minister Michael Dugher commented: "Doing the right thing by referring Baroness Warsi to the independent adviser on the ministerial code only exposes David Cameron's failure to act in relation to Jeremy Hunt."
Yesterday the prime minister insisted that he had done the right thing, however, and that this was not a question of double standards.
"In the case of Jeremy Hunt, obviously all of that has been gone through by the Leveson inquiry," David Cameron told Sky News on Tuesday.
"In the case of Sayeeda Warsi, I am very happy with the explanation she has given.
"She has apologised for the mistake she has made but I think it right for Sir Alex Allan just to see if there are any loose ends that need to be picked up. It's no more than that."