Tax row Tory Nadhim Zahawi should stand aside while a probe into his affairs is ongoing, a senior Conservative has said.
Ex-Minister Caroline Nokes broke ranks to call on her party colleague to recuse himself from his role as Tory chairman while Rishi Sunak's sleaze watchdog looks into a multimillion pound tax dispute he resolved by paying a penalty to HMRC
Mr Zahawi is alleged to have paid an estimated £5million penalty when he was Chancellor - and in charge of UK tax policy - between July and September.
The Prime Minister ordered his new ethics chief, Sir Laurie Magnus, to look into the row in a bid to defuse the latest Tory sleaze scandal.
It comes only days after Mr Sunak told MPs that Mr Zahawi had "already addressed this matter in full". No10 insisted the PM had not been aware at the time of PMQs that Mr Zahawi had paid a penalty to HMRC.
Ms Nokes said the row was a "hangover from Prime Ministers past", in a swipe at Boris Johnson whose time in No10 was dogged by allegations of sleaze.
The Women and Equalities Committee chair told BBC Breakfast: "Sadly this looks like a hangover from Prime Ministers past and I think Nadhim needs to come clean on all of the questions that are being posed by journalists and others, and that we need clarity.
"I think it's a really difficult situation for any Government minister when you are pretty much leading the news on every front page this morning."
Asked if he should stand down, she said: "Nadhim should stand aside whilst this investigation is carrying on.
"There are great precedents of ministers who have been competent, hardworking - and Nadhim is a certainly a very talented politician but maybe he should temporarily recuse himself until this investigation is over."
Shadow Foreign Secretary David Lammy said Nadhim Zahawi "ought to resign or be sacked" over the tax dispute.
He warned that it was not acceptable to be "careless" with money that pays for teachers and nurses.
"When you've been Chancellor of the Exchequer and you said you've been careless despite the fact that offshore trusts have been set up in Gibraltar, I'm sorry you really ought to resign or be sacked," he told Sky News.
Policing Minister Chris Philp floundered on the airwaves after facing a barrage of questions over Mr Zahawi's tax affairs.
He said it was for the Prime Minister's ethics adviser to find out "the facts" behind Mr Zahawi's "carelessness" in reporting his financial affairs to HMRC.
Gov.UK states that "carelessness" with tax affairs can be likened to the "longstanding concept in the general law of negligence", he was told by Today presenter Mishal Husain.
Asked whether the PM found it acceptable for minister to be "negligent in their tax affairs", Mr Philp said: "We've got this word 'careless' that has been put into the public domain.
"We don't know exactly what it was that that carelessness represents."
Pressed again, he said: "You're effectively inviting me to speculate on exactly what happened.
"I don't know exactly what happened, I don't know what form that carelessness took and nor probably does anybody else apart from HMRC and Mr Zahawi. So let's find out the facts."
In a statement on Monday, Mr Zahawi said: "I welcome the Prime Minister's referral of this matter to the independent adviser on ministerial standards.
"I look forward to explaining the facts of this issue to Sir Laurie Magnus and his team.
"I am confident I acted properly throughout and look forward to answering any and all specific questions in a formal setting to Sir Laurie."
He said it would be "inappropriate to discuss this issue any further" while he was Conservative chairman.
