Tory defector Christian Wakeford has claimed he was threatened he would not get a new high school in his constituency if he didn't vote with the Government.
The Bury South MP, who sensationally joined Labour on Wednesday, backed up reports that rebel MPs were being threatened with the loss of constituency funding by Tory enforcers.
Senior Conservative William Wragg accused No10, special advisers and whips of "blackmail" against MPs unhappy with Boris Johnson.
In an explosive statement in Parliament, he suggested rebels should report their concerns to the police.
The Prime Minister said he had seen "no evidence to support any of those allegations" as he visited a diagnostics centre in Taunton.
He said he would "of course" look for evidence to support Mr Wragg's allegations.
But Mr Wakeford revealed that he was told he would lose out on a school if he didn't toe the line.
He told BBC North West: "I was threatened that I would not get the school for Radcliffe if I did not vote in one particular way.
"This is a town that's not had a high school for the best part of 10 years.
"How would you feel when holding back regeneration of a town for a vote?
"It didn't sit comfortably and that was really starting to question my place where I was and ultimately to where I am now."
A Labour source said the vote in question related to free school meals.
Chief Secretary to the Treasury Simon Clarke claimed the Tory defector was not a "neutral source" on allegations of intimidation.
He told Times Radio: "It's either something he can substantiate or it isn't. I think that's the point.
"And I simply need to see any evidence that that has in fact occurred. I think we have to accept objectively here that Mr Wakeford is not entirely a neutral source on these matters, having made the decision that he has."
The Manchester Evening News reported in February 2021 that the "long awaited high school in Radcliffe" had been approved by the Government as one of four new free schools to have been given the green light across Greater Manchester
Labour's Jonathan Ashworth accused the Government of being "rotten to the core".
The Shadow Work and Pensions Secretary said: "Tories play politics with the life chances of young people.
"Boris Johnson’s government is rotten to the core."
Mr Wragg, the Tory chairman of the Public Administration and Constitutional Affairs Committee, sparked the explosive row when he revealed that he had received reports "members of staff at 10 Downing Street, special advisers, government ministers and others encouraging the publication of stories in the press seeking to embarrass those who they suspect of lacking confidence in the Prime Minister".
He said the whips were responsible for pushing forward Government business but added: "It is not their function to breach the ministerial code in threatening to withdraw investments from members of parliament's constituencies which are funded from the public purse."
Mr Wragg told the Commons hearing: "The intimidation of a Member of Parliament is a serious matter.
"Reports of which I am aware would seem to constitute blackmail.
"As such it would be my general advice to colleagues to report these matters to the Speaker of the House of Commons and the Commissioner of Metropolitan Police."
The senior backbencher is among the Tories who have publicly confirmed that they have submitted letters of no confidence in the PM.
Commons Speaker Sir Lindsay Hoyle said it could be a "contempt" of Parliament to block MPs from doing their work - and warned that MPs and their staff are "not above the criminal law".
"While the whipping system is long-established, it is of course a contempt to obstruct members in the discharge of their duty or to attempt to intimidate a member in their parliamentary conduct by threats," he said.
But Tory MP Michael Fabrican branded Mr Wragg's comments "nonsense".
"If I reported every time I had been threatened by a whip or if a whip reported every time I had threatened them, the police wouldn't have any time to conduct any other police work," he said.
A No 10 spokesperson said: "We are not aware of any evidence to support what are clearly serious allegations.
"If there is any evidence to support these claims we would look at it very carefully."
