The leader of Conservative Euro-MPs is facing calls for an investigation after it was revealed he funnelled some of his parliamentary allowances into his family company.
Giles Chichester was forced into revealing his use of the allowance after David Cameron, Tory party leader, instigated a 'clean-up' campaign following the scandal around Derek Conway.
European parliament staff allowances are worth £160,000 a year. Mr Chichester has now paid almost £500,000 of those allowances into a family company of which he is a paid director.
Now fellow European MEPs are calling for an investigation into the conflict of interest, with the Conservatives promising to cooperate with any investigation which occurs.
Documents for the publicly registered company show £445,000 of parliamentary allowances were paid into the firm "in connection with secretarial and assistant services for the European parliament, constituency and committee work".
While the company has suffered a net loss since 1996, company directors have received £158,938. Of that, £47,792 was paid after 2002, when Mr Chichester and his wife became sole directors.
A Conservative party spokesman commented: "Mr Chichester received a letter raising a potential conflict of interest 18 months ago, he replied clarifying the position but has since heard nothing from the authorities.
"There has been no suggestion that he has broken any rule.
"David Cameron has placed great emphasis on the need for transparency, and in keeping with this Mr Chichester is happy to supply details of all of his expenses to the parliamentary authorities if required to do so."