Ed Balls and Yvette Cooper face sleaze watchdog probe over using expenses to pay their mortgage

Schools Secretary Mr Balls and Miss Cooper, who is Chief Secretary to the Treasury, have been accused of 'breaking the spirit or even the letter' of Commons rules by using the perk to help pay for a £655,000 home in North London.

The watchdog's office confirmed it was probing the married couple's use of their second homes allowance, which is worth £24,006 this year.

Yvette Cooper and Ed Balls arrive for a Cabinet meeting at Downing Street last week. The pair are now facing a parliamentary probe

News of the inquiry came to light after it was revealed yesterday that parts of a wide-ranging review into MPs' pay and perks had been omitted.

The Commons' Members Estimate Committee said it was unable to make recommendations about MPs who live together and claim on the same property because the investigation was 'subjudice'.

The couple last night insisted they had 'acted within Parliament's rules'.

Mr Balls and Ms Cooper, both tipped as possible future Prime Ministers, are the first husband and wife to serve together in the Cabinet.

But they became embroiled in a sleaze row last February when Tory MP Malcolm Moss complained to the standards commissioner about their expenses.

He claimed the couple had been able to 'maximise' their taxpayer-funded mortgage payments by claiming the property was their second home.

The pair, who represent neighbouring constituencies in West Yorkshire, sold their house in Lambeth, South London, for £545,000 in April and bought a more expensive four-bedroom home in Stoke Newington, North London.

Between 1999 and 2005, Miss Cooper had declared another property in Castleford, West Yorkshire, as their second home.

By switching to designating the London property as their second home, they qualified for up to £44,000 a year to subsidise a £438,000 mortgage.

The Commons 'Green Book' which sets out the rules on MPs' allowances states: 'If you have more than one home, your main home will normally be the one where you spend more nights than any other.'

The pair's three children go to school in London, and they spent weeknights in the capital.

The Additional Costs Allowance (ACA), under which they have claimed for their London residence, is not to be used for MPs' primary residence.

A spokesman for the couple said today: 'Malcolm Moss has made a complaint to the Parliamentary Commissioner for Standards, which is currently being considered.

'Ed Balls and Yvette Cooper have done everything in accordance with advice from the Fees Office, which has confirmed they have acted within the rules.'

It is understood that Mr Balls' and Ms Cooper's claims for the most recent financial year 2007-08 totalled £24,438.

Sources close to the couple said that despite their ministerial duties, they spent as many nights at their Yorkshire home as in London.

The standards watchdog has thrown out similar complaints about husband and wife Labour MPs Alan and Ann Keen, and Peter and Iris Robinson, who represent the Democratic Unionists.

In the year to March last year, the commissioner for standards received complaints about 131 of the 646 members of the House of Commons.

Of these, it investigated just over a third, and of those, it found rule breaches in two-thirds of cases.

Mr Brown has already lost one Cabinet minister over allegations of sleaze when Peter Hain quit as Work and Pensions Secretary after police began an investigation into the funding of his unsuccessful deputy leadership campaign.