PM faces fresh expenses controversy

Transport Secretary Geoff Hoon insisted he had done nothing wrong by renting out the London flat listed as his "main" residence while living in a rent-free grace and favour apartment.

The arrangement, which allowed him to also claim tens of thousands of pounds in second-home allowances for running his constituency home, was approved by the authorities, he said.

While there was no suggestion Mr Hoon had broken the rules, the latest revelation about the Westminster pay and perks system helped fuel demands for urgent reform.

The Tories said they would bar ministers from doing the same and Liberal Democrat leader Nick Clegg said it was "barmy" that politicians could effectively have two homes paid for out of taxpayers' cash.

The Prime Minister has proposed abolishing the controversial second-home allowance in favour of a flat rate overnight payment as part of a sleaze watchdog's review of the system.

The Committee on Standards in Public Life has brought forward its inquiry and hopes to put forward recommendations by the end of the year.

And confronted by the revelations about Mr Hoon at the latest in a series of international summits, the PM said the issue should now be left to the committee to investigate.

"I think over the last few days the world has made sufficient advances in how we can deal with the economy, how we can deal with terrorism, how we can deal with security and these are the issues I am concentrating on," he said from the EU/US gathering in Prague.

"All these other issues are being dealt with by the Committee on Standards in Public Life".