Brown: My Downing St flat is not free - I pay the council tax on it - News

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The Prime Minister insisted he had to pay council tax on the flat in No11 Downing Street. The top rate in Westminster is £1,375 a year.

Mr Brown, whose salary is £194,250, also makes a payment for the grace-and-favour home, as a taxable benefit in kind, which covers utility bills.

The Prime Minister, who claimed £17,073 for his Fife constituency home in 2007/08, said regulations on MPs' expenses need reform.

"MPs have a duty to satisfy the public that public money is being spent well. I don't shirk from that responsibility," he told The Independent. He stressed he always abided by Commons regulations.

Mr Brown has agreed to meet Tory leader David Cameron to discuss how to overhaul the expenses system in the wake of the storm over Chancellor Alistair Darling, Housing Minister Margaret Beckett and Transport Secretary Geoff Hoon who rent out London flats while living in grace-and-favour homes and claiming expenses for another home.

But there is no evidence they have broken any rules and are believed to have paid council tax on their grace-and-favour homes which are treated as a taxable benefit in kind.

Labour sources accused Mr Cameron of exploiting the row by pledging to scrap publicly-funded second homes. They say the system will be shaken up by the next election.