The British coalition government faces its first difficulties today after chief secretary to the treasury David Laws was forced to apologise over parliamentary expenses running into tens of thousands of pounds.
The Liberal Democrat Cabinet minister's job looked to be hanging in the balance after it emerged he channelled more than £40,000 of taxpayers' money to his long-term partner.
He claimed up to £950 a month in expenses for five years to rent rooms in two properties owned by lobbyist James Lundie. Parliamentary rules ban MPs from "leasing accommodation from a partner".
Last night Mr Laws — who this week promised public spending curbs that would send "shockwaves" through Whitehall — apologised and announced that he would "immediately" pay back the money in the wake of the Daily Telegraph's disclosures, as well as referring himself to the parliamentary standards commissioner.
The Yeovil MP also chose to 'out' himself as gay — although the newspaper stressed it had not intended to reveal his sexuality.
"James and I are intensely private people," he said in a statement. "We made the decision to keep our relationship private and believed that was our right. Clearly that cannot now remain the case.
"My motivation throughout has not been to maximise profit but to simply protect our privacy and my wish not to reveal my sexuality."
Mr Laws insisted that, despite having been in a relationship with Mr Lundie since 2001, the fact had been "unknown to both family and friends throughout that time".
According to the Telegraph, between 2004 and 2007, Mr Laws claimed between £700 and £950 a month to sub-let a room in a flat in Kennington, south London.
This flat was owned by Mr Lundie, who was also registered as living at the property. He sold the flat for a profit of £193,000 in 2007.
In 2007, Mr Laws' partner then bought another house nearby for £510,000. The MP then began claiming to rent the "second bedroom" in this property. His claims increased to £920 a month. The partner also lived at the property. Mr Laws' main home is in his Yeovil constituency.
The arrangement continued until September 2009, when Parliamentary records indicate that Mr Laws switched his designated second home and began renting another flat at taxpayers' expense. His partner remained at the Kennington house.
Since 2006, Parliamentary rules have banned MPs from "leasing accommodation from a partner".
But Mr Laws — a millionaire former City banker — insisted: "At no point did I consider myself to be in breach of the rules which in 2009 defined partner as 'one of a couple... who, although not married to each-other or civil partners, are living together and treat each other as spouses'.
"Although we were living together we did not treat each other as spouses — for example, we do not share bank accounts and indeed have separate social lives.
"However, I now accept that this was open to interpretation and will immediately pay back the costs of the rent and other housing costs I claimed from the time the rules changed until August 2009." He added: "I regret this situation deeply, accept that I should not have claimed my expenses in this way and apologise fully."
Downing Street issued a terse response on behalf of David Cameron, merely saying: "The Prime Minister has been made aware of this situation and agrees with David Laws' decision to self-refer to the Parliamentary Standards Commissioner."
But the revelations are a major setback for the Tory-Lib Dem coalition. Mr Laws was a pivotal figure in the negotiations between the parties after the inconclusive General Election result.
As a senior figure on the right of the third party, he was previously wooed by George Osborne to defect to the Conservatives.
Since taking on the role as Mr Osborne's Treasury deputy in the coalition, Mr Laws has impressed Tories with the vigorous way he has set about implementing spending cuts, and his strong performance defending the first £6.2 billion of reductions in the Commons this week.
The controversy over his own expenses could undermine his credibility in cracking down on pay and perks for the public sector — one of the main targets in the drive to save government money and tackle the deficit.
Mr Laws' position will not be made any easier by the righteous tone he has previously struck on the issue of expenses.
In a press release on his website from June 18 last year, the Lib Dem declared that because he rented accommodation in London he had made "no gain from buying a property with help from the taxpayer".
It now appears, however, that his partner did make substantial capital gains on properties that the taxpayer helped fund.
Mr Cameron has previously made a point of taking a hard line on expenses abuses among his own ranks, while Lib Dem leader and deputy prime minister Nick Clegg has boasted that his party emerged unscathed from the scandal.
The episode will also be the first test of how Mr Cameron and Mr Clegg co-operate over man management.
Under the coalition protocol that has been hammered out, Mr Clegg must be "fully consulted" before any Lib Dem minister is removed from a government post.
Sir Alistair Graham, former chairman of the Committee on Standards in Public Life, said that it was "staggering" that the information had only just come to light now.
"I'm a genuinely shocked that somebody who is now Chief Secretary to the Treasury is faced with disclosure of this nature where he clearly hasn't told the full truth to the people dealing with expenses in the House of Commons," he told the BBC.
"Given all the expenses farrago that has gone on over the past two or three years the fact that it has come to light now when he is a key part of a coalition government is staggering really.
"How did this not come in the inquiry? Or why, knowing that these matters were spotlight, he didn't come forth himself.
"Even if he was trying to protect his relationship, which would appear has ended, that he didn't want to come out and say, 'There may be some question marks over expenses I have claimed and I would like to clarify the situation before we go into a general election'."
PA