The Conservative Party today withdrew the party whip from a disgraced MP who is facing a second sleaze inquiry and also a possible police investigation over alleged misuse of parliamentary allowances.

Derek Conway was accused by the Commons Standards and Privileges Committee yesterday of conduct that approached corruption, risking the reputation of all MPs.

The Commons watchdog recommended that Mr Conway be suspended from Parliament for ten days and repay up to £13,161 of the £43,000 in salary and bonuses he gave to his younger son, Frederick (Freddie) Conway, to act as a part-time parliamentary researcher while the he was a full-time student at Newcastle University.

MPs are expected to approve the sanctions before the weekend, possibly on Thursday.

The MP for Old Bexley and Sidcup learned this morning that he now faces a second investigation amid claims that his elder son, Henry, was also paid around £32,000 out of Mr Conway's staffing allowance, for little apparent work.

John Mann, a Labour backbencher, confirmed that he would today be submitting a fresh complaint to John Lyon, the Parliamentary Standards Commissioner, over Henry.

Meanwhile, Duncan Borrowman, the prospective Liberal Democrat candidate in Old Bexley and Sidcup, said that he had written to the Metropolitan Police asking for a criminal investigation into the MP's use of his staffing allowances.

"The bonuses paid by Mr Derek Conway to members of his own family were, in absolute and percentage terms, substantially in excess of those paid to staff who were not family members," said Mr Borrowman.

Last night David Cameron signalled that he did not intend to impose any further punishment on Mr Conway. The Tory leader's position was reiterated this morning by a Tory spokesman, who said: "The appropriate punishment is being administered."

But at 1pm today a statement from the Tory party showed that Mr Cameron had had a change of heart. "The usual procedure in these cases is to leave the punishment to the House of Commons authorities," the statement read.

"However, having asked the Chief Whip to speak again to Mr Conway and having personally reflected overnight I have decided to withdraw the Conservative Whip from Mr Conway."

Mr Cameron had come under pressure from inside and outside his party to take a tough line with Mr Conway, to fend off accusations that politicians were less strictly disciplined for suspected financial irregularities than workers in the private sector.

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