Watchdog may probe Osborne expenses

Standards commissioner John Lyon has received a complaint that the shadow chancellor mortgaged his constituency home for more than he paid for it.

Meanwhile, Tory leader David Cameron said he will repay almost £1,000 he wrongly claimed on Parliamentary expenses after reviewing his claims over recent weeks.

The Tory leader had already announced his intention to pay back £680 he claimed towards repairs at his second home in Oxfordshire. But on Thursday he wrote to the Commons Fees Office volunteering the repayment of £947.29 - including the £680 for repairs - after identifying a series of over-claims.

Mr Cameron revealed he was sending a cheque enclosed in a letter to Terry Bird, the Commons' director of operations. The additional amounts for which he is reimbursing the Fees Office include £218.91 in mortgage over-claims resulting from "an inadvertent administrative error" arising from changes to his home loan arrangements and £9 he was over-compensated for on an electricity and gas bill.

The complaint against Mr Osborne is believed to have come from a Labour voter in his Tatton constituency. It alleged the MP took out a mortgage of nearly £5,000 more than the reported price of his house.

The suggestion is that he claimed Commons allowances to cover interest payments on the whole debt, rather than just the cost of buying the house.

A spokeswoman for Mr Lyon's office said: "The commissioner has received a complaint, and is looking at it."

It is also understood one of Alistair Darling's constituents lodged a complaint that he "flipped" second home designations four times in four years to maximise expenses.

The apparent "tit-for-tat" complaints came amid signs Labour and the Tories are stepping up their battle for the moral high ground on the toxic issue.