Osborne ordered to repay second mortgage expenses

But the cross-party Commons Standards and Privileges Committee found that the breach was "unintended and relatively minor".

Commons Standards Commissioner John Lyon launched an investigation into Mr Osborne's claims after complaints that he claimed for the interest on a 450,000 mortgage on his farmhouse in Cheshire when the property cost him only 445,000. He found that the Tatton MP was overpaid a total of 1,936, of which he has already repaid 270.

Yesterday's report by the Standards and Privileges Committee recommended that he should hand back the remainder.

In a letter to the committee chairman earlier this week, Mr Osborne said he was happy to accept Mr Lyon's conclusions and made clear he had already offered to return the overpayment in full.

Responding to yesterday's ruling, the Shadow Chancellor said: "I am happy to accept the committee's report. I am glad that they acknowledge that any breaches of the rules were not intentional, not major, and did not provide me with any significant financial benefit.

"As the committee appreciate, I always sought to minimise the cost of my expenses to the taxpayer, and followed the advice I was given. The committee has now decided that advice was flawed.

"I understand the damage the expenses crisis has done to Parliament, and the paramount importance of restoring trust in our politics.

"I want to ensure that the claims I have made are entirely beyond reproach."

Mr Osborne bought the Cheshire house for 445,000 in 2000, before entering Parliament, taking out an increased mortgage on his London home to fund the purchase.

When he became an MP in 2001, he sought advice over his claims under Additional Costs Allowance, which is intended to cover the cost for MPs outside central London of maintaining a base both in their constituency and near Westminster.

He was told by the Commons Fees Office that he could designate the Cheshire house as his main home and claim ACA on the London property, even though some of the payments related to the purchase of his constituency home.

Mr Lyon found this was "against the rules" but said it would be unfair to see it as a serious breach.