Another politician may face court over expenses

The announcement came as four Liberal Democrat MPs were ordered to apologise and pay back thousands of pounds in "windfall" payments which they received for giving up cheap rents on their taxpayer-funded second homes.

Scotland Yard said the file was given to the Crown Prosecution Service yesterday afternoon. It was the seventh to be completed and sent to prosecutors by detectives at the Metropolitan Police's specialist crime wing. The identity of the politician involved was not confirmed.

Three Labour MPs and a Conservative peer appeared in court nine days ago accused of theft by false accounting. MPs David Chaytor, Elliot Morley and Jim Devine, along with Lord Hanningfield, insisted their case should be dealt with by Parliament's authorities instead.

Labour peers Baroness Uddin and Lord Clarke of Hampstead have been told they will not be prosecuted.

Yesterday the Commons Standards and Privileges Committee said Liberal Democrats John Barrett, Sandra Gidley, Paul Holmes and Richard Younger-Ross had shown "serious misjudgment" in keeping the money themselves rather than returning it to the public purse.

Two other Lib Dem MPs, former leader Sir Menzies Campbell and former deputy leader Sir Alan Beith, were also rebuked for "lesser misjudgments" but face no other action.

The cases involving the Lib Dems concerned flats which they rented in Dolphin Square in Westminster – a block that has long been popular with MPs because of its proximity to Parliament.

In 2005, the block – which had previously been owned by a non-profit-making trust – was acquired by owners who offered lump sum payments to tenants prepared to give up their entitlement to cheap rents.

Mr Barrett, Ms Gidley, Mr Holmes and Mr Younger-Ross all took the payments and then moved into other flats in Dolphin Square or nearby for similar or higher rents which they continued to claim on expenses.

Sir Menzies and Sir Alan accepted smaller sums for giving up the rights of their successors to cheap rents, however the committee accepted that in both cases they had used the money to save public funds.

All six MPs referred themselves to the committee after the position of the Dolphin Square tenants was revealed last year.

The Parliamentary Commissioner for Standards John Lyon, who carried out the investigation for the committee, said the ruling could have "significant implications" for other MPs with flats in Dolphin Square.

"The key point, I believe, is that it was the payments from parliamentary resources, sometimes over many years, which put each member in the position of being offered a sum of money, in effect, to buy out their rights as protected tenants," he said.

"In my judgment, public funds should have benefited from the acceptance of any offer arising from these rental payments. And, in my judgment, public funds should have benefited to the full."