Boris Johnson has been warned that alleged threats to cut off constituency cash from Tory rebels may be unlawful.
The Good Law Project has sent a pre-action letter to the Prime Minister over claims Tory enforcers have been warned MPs they could lose funding if they don't toe the line.
Lawyers said the allegations "may amount to misconduct in public office" in a letter to the PM, Levelling Up Secretary Michael Gove, Cabinet Office Minister Steve Barclay and Chief Whip Mark Spencer.
The letter also demands details of any complaints made by MPs about these threats, and for the Government to confirm they are investigating the allegations.
Downing Street is resisting calls for a probe into claims Tory MPs are being intimidated into supporting the PM, who is battling for his political life after the Downing Street party saga.
Senior Tory William Wragg said on Thursday that Tory critics were receiving threats to "withdraw investments" from constituencies, as well as "intimidation" from No 10 staff, special advisers and Government whips.
Mr Wragg, chairman of the Commons Public Administration and Constitutional Affairs Committee, said the threats could amount to "blackmail" - and urged MPs to report them to the police.
Tory defector Christian Wakeford, who joined Labour this week, said he had been threatened that funding for a new school in his constituency would be withheld if he did not vote with the Government over free school meals.
The Good Law Project, which has previously challenged the Government over Covid contracts, revealed it had sent a pre-action letter to the PM following the allegations.
The campaigners have previously demanded answers over claims of the use of similar underhand tactics in a vote in November to save Tory Owen Paterson from censure for breaking sleaze rules.
Director Jo Maugham said: "What these reports suggest is that public money will be held back from left-behind communities unless their MP votes to overlook sleaze, or scrap school meals.
"That’s not levelling up; it sounds much more like blackmail to me.
"We don’t think it’s lawful - it may even be criminal - and it’s certainly unfair. So we are taking legal action to benefit left-behind communities."
On Friday, a spokesman for the Prime Minister said: "We're not aware of any evidence to support what are clearly serious allegations.
"If there was any evidence to support it, it would of course be looked at."
Business Secretary Kwasi Kwarteng told Sky News: "As far as the specific allegation about whips withholding funds, I think that's completely unacceptable.
"Any form of blackmail and intimidation of that kind simply has no place in British politics.
"We need to get to the bottom of the matter. But I find it very unlikely that these allegations are true."
