Tory peer breached rules – but not over rent claims

However, the Cabinet Minister was found to have breached rules by failing to declare that she was letting her own London home.

The peer faced criticism from Labour for allegedly pre-empting a report by House of Lords standards commissioner Paul Kernaghan after saying he had “dismissed” the allegations against her.

Mr Kernaghan has been looking into accusations that Lady Warsi claimed as much as £2,000 while staying rent-free at a property belonging to Conservative donor Dr Wafik Moustafa.

She insisted she had made a “financial contribution” to her aide, Naweed Khan, who lived at the house during 2008.

In a statement yesterday, the peer said she was “delighted” to draw a line under the matter, while David Cameron said it cleared the way for her to lead the Conservatives’ campaign for the election of police and crime commissioners.

“I have always maintained that the allegations surrounding my expenses were untrue and I am delighted that Paul Kernaghan has dismissed them,” Lady Warsi said.

“His report and the report by Sir Alex Allan – two independent inquiries – have now drawn a line under these matters and my only focus now will be to get on with my job.”

The Prime Minister added: “I am pleased that these allegations have been dismissed by the Lords Commissioner.

“With elections for police and crime commissioners in the autumn, this will be a big summer of campaigning for the Conservative Party. As co-chairman, Sayeeda (Warsi) will be leading that campaign.”

The announcement was made after Mr Kernaghan wrote to Lady Warsi notifying her of his conclusions.

However, his report has not been published or endorsed by the Lords committee that considers conduct matters.

Later, House authorities clarified that she had in fact been found in breach of rules.